Delusional Notions

Thoughts on product marketing, remix culture, and assorted ephemera.

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Live from #ISUM12: Best Practices for Better UX/UI Design in Mobile & Tablets with Sally Benham @saya4

“Live” notes from Internet Summit 2012 in Raleigh, November 7-8, 2012. See all my notes from Internet Summit 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Saya “Sally” Benham. Creative Director, Design 4UX

Designing for the Mobile Mindset

Differences with Desktop
People have an emotional connection to their smartphones that they don’t have to their desktops.

More interaction. Orientation sensors, direct touch experience for users, etc.

Sequential aspects to interaction: unlock phone, launch app, login to app account, use app, etc. More modal than the desktop – on the desktop you can choose many different paths to accomplish things.

Gathering Data and Understanding your Audience. 

Who is my target market? What’s your relationship to the target market as designer? Are you part of it or not?

Personas, user interviews, etc.

Data should help us find the point-of-pain relevant to our App design.

Responsive Web Design vs. Mobile App Design

Responsive Web Design (RWD) is a design approach in which a site is crafted to provide an optimal viewing experience accords a wide range of devices without requiring a separate app. (example: bostonglobe.com)

Benefits: design it once, use it on all devices. No app required, only access from browser:

Drawbacks: Requires clever design and implementation to make it work. If you have limited assets and information, RWD is great. But it typically requires a fast internet connection. Images are scaled by browser, so requires more processing power. Also requires compromises in the design because certain interactions don’t map well to the rescaled/reflowed content.

Mobile website design means a website specially designed for access on mobile devices. Involves different design and code than normal websites, but allows use of mobile-optimized images and less processing power.

Benefits: Faster because the code is smaller/less complicated.

Drawbacks: Doesn’t typically handle specific tools and processes, especially related to eCommerce.

Mobile App Design.

Benefits: Focus on one task: calendar, to-do list, etc. Can enter and store specific personal information related to the task.

Drawbacks: Must be written specifically for a given device. Users need to actively download and install them to begin using. Cost considerably more to develop than typical mobile web development.

Screen Orientation Considerations

Mobile devices are unique in that they have multiple orientations.

Consider the default orientation. For phones this is portrait, but for Win8 table & Blackberry Playbook it’s landscape.

If possible, use a design that is flexible and can adjust to either orientation without losing critical information or features.

Navigation Patterns

Navigation is a critical UX design consideration because it’s how we tell users how to go and find information and use it.

In general, put control buttons at the bottom of your app and information at the top.

Several different types of navigation:

Search-based. User signs in or inputs a search term, and then goes to the next screen where results are located.

Listed Item Navigation. Very popular, a list of items that can usually be expanded to show more information in the same page.

Vertical Navigation. Not popular in the mobile platform. Navigation buttons located along the side of the screen rather than at the bottom.

Horizontal or Tab Navigation. 90% of web or mobile sites use this. Fixed permanent navigation bar at bottom and then additional navigation items above as necessary.

Scrolling Horizontal Bar. Like horizontal navigation but you can scroll left and right to uncover more navigations.

Image-based Navigation. Similar to icon-based images, but typically not recommended due to loss of detail in images.

Gesture Design. A new approach to smartphone design. Incorporates non-verbal communication where body actions communicate a particular message: pointing, tapping, pitching sliding are known, but apps & sites are starting to use blowing, shaking, arm movement, etc.

Use of Icons

Icons are a quick & easy way to pass information to the user in a concise & simple way. Carries an emotional, non-verbal message. 

Icons are a visual coding system. They represent an idea, experience, object, or action. Receivers view the icon and “decode” it to get the message.

International vs. Conventional. Flame, for instance, means “fire” – it’s international. Other things, like “Statue of Liberty” might mean “Freedom” in the US but won’t translate to other countries.

UX, Microcopy, and Input Design

Remember the UI is very small.

44-pixel rule (88 pixels on retina display) — size of a fingertip per Apple’s guidelines.

Notifications & Microcopy. Inform users about the content they care about and is important to them at the moment it arrives. Example: traffic jam information before the user gets in his car in the morning.

Don’t interrupt users for Sales offers. Respect their quiet time. Don’t bother them. Don’t spam them. They’ll remove your app.

Let users personalize their notifications as much as possible. Example: ESPN lets users pick a sport, team, kind of alerts, etc.

Consider push notifications as part of your brand. You should care about language, design, and content. They’re simple but you can be creative.

Be short but valuable. Providing relevant, concise information builds trust with the user.


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Live from #ISUM12: Integrating Social Into Overall Marketing Plans with Joey Sargent

“Live” notes from Internet Summit 2012 in Raleigh, November 7-8, 2012. See all my notes from Internet Summit 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Advanced Social Media

1. Operational Integration

SM should be a core part of all operations. Marketing shouldn’t be the only people aware of or using social. If sales is doing something different, that’s bad.

2. Cross functional teams.

Social strategy should be a combination of marketing, sales, product, customer service, PR, even legal.

3. Centers of excellence

If you have a cross functional team and you’ve decided your’e going to be leaders in how to approach social media, then you can create an ELITE TEAM who can educate/train others in how to do it.

This group can also be in charge of managing agency relations, etc., so you don’t have multiple strategies coming from different parts of the business.

Creates policies & procedures for social media. Lots of companies – even big ones – still don’t have these. It’s not about what you CAN’T do, it’s also about what you DO want to do. Ways your people can help you on their personal and/or corporate accounts.

If you don’t have something in place, someone WILL do something you didn’t want, and you’ll have to deal with it.

4. C-suite visibility

If you have someone in the c suite who’s a champion for social media, they will help persuade others. Especially in regulated industries, people are scared of SM. You need to find the right touch points in the C-suite to overcome those fears. Build those relationships.

5. Metrics: What to measure

It doesn’t matter how many tweets you send, it matters how many people re=share them or how people engage with them.

Engagement

Reach

Conversions

Sentiment

How many people does your activity bring to your trade shows, etc.? How many contacts translate into real sales?

ASSEMBLY INSTRUCTIONS

How to take this approach and actually build it into your social media. How to show people that social media is ONE THING but it’s more powerful when layered into other activities.

Social & mobile. Made for each other.

Post-PC era. 46% of US adults already own a smartphone. 119 million tables sold in 2012. 25 billion mobile apps downloaded by 2015.

Content is made for sharing:VideoNewsletter ArticlesBlogsWhite Papers

Reuse/Repurpose/Recycle

People may not want your newsletter, but do read your blog. People might not want your eBook but might sit through a webinar. You can take the same basic content and distribute it 50 different ways.

PUTTING IT TOGETHER: Social media mixed with Traditional marketing

The way we consume media is changing, but we don’t spend ALL our time online. We still go shopping, we still see billboards and read magazines.

Tradition marketing isn’t going to go away, but it is going to change.

PUTTING IT TOGETHER: Social & email

Email and social are completely intertwined. By adding social media icons to email, some companies see as much as 60% increase in reach.

Other social in email:employee email signatures, promo messages, welcome messages for signup (“Thanks for signing up, also follow us on Twitter!”). It’s really simple to go through and check to see if you’re giving people the opportunity to share things. Lots of people aren’t doing that.

Keywords are important not just for SEO but also for social media. Picking the right hashtags, using the right phrases, etc., is critical for positioning your brand even on social feeds.

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Live from #BOS2012: “The Surprising Truth About Moving Others” with @danpink

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

The Surprising Truth About Moving Others, Daniel Pink

Core concept of “Drive.” There’s a key motivator inside organizations, which we call an “if/then” motivator. If/then rewards (controlling contingent rewards) are effective for simple, repetitive tasks. They’re ineffective don’t work very well for heuristic, conceptual, creative tasks.

About 3 days after I finished the book, I started getting email from readers saying if this is right, then what about salespeople? Isn’t sales built entirely on if/then rewards. And my response to that was, “Uh-oh.”

We often hear salespeople are coin-operated.

Email from Neil Davidson (Red Gate & BOS!). Noticed his salespeople were gaming the compensation system no matter how complicated he made it. So Neil eliminated commissions. And it worked. Why? Taking away commissions made everyone more collaborative, and it made customers happier. And I realized I knew nothing about this, so I decided to figure it out and write a book!

So let’s talk about what I learned in this two-year investigation of sales.

I discovered a word. It makes developers roll their eyes, but business people like it.

“Disintermediation.”

This is what’s happening to sales people around the planet. In a world of Amazon where we can do our own research and price-shopping, salespeople are going the way of meter maids and telephone operators.

I beg to differ. In the US, we have 15 million people working in sales. That’s more than in manufacturing and WAY more than in state or federal government. In 2000, before the rise of disintermediation (i.e. before the penetration of the internet), 1 in 9 Americans work in sales. Today, same proportion. So the “death of the salesman” meme isn’t real.

But that’s not the big story. The big story is the other 8 out of 9 people. They’re in sales, too. They’re in what I call “non-sales selling.” They spend their day selling in a broader sense, persuading other people to exchange time and other resources for something.

So I had this sense that even though it doesn’t involve money changing hands, these 8 out of 9 people really are in sales. So we did a bunch of survey research on 7000 adult full-time US workers. Tried to get a handle on what people actually do at work. Won’t cover the full results, but here’s one question:

What percentage of your work involves convincing or persuading people to give up something they value (attention,e fort, money, time, etc. ) for something you can offer?

We asked people to set a slider to answer this question. And here’s what we found. Average answer was 41%.

This tells us that like it or not, we’re all in sales now. A significant proportion of what we all do involves moving other people somehow. And you know what? We don’t like it!

Why?

Another question: When you think of “sales” or “selling” what is the first word that comes to mind?

Took the top 25 adjectives and made a word cloud. And the big words were PUSHY, YUCK, UGH, DIFFICULT, SLIMY, ANNOYING, HARD, SLEAZY, etc. 21 had a negative valence, only 4 were positive.

So if we’re all in sales, does that mean we all have to be sleazy and manipulative?

We’ve lived in a world where there was an information asymmetry between seller and buyer. What are the two words of latin most Americans know? Caveat Emptor.

But that asymmetry is ending at a rate that’s pretty mind-boggling.

It’s harder to get hoodwinked when I’m buying on equal information terms. Or if I do get hoodwinked, I can tell people. So in this world of information symmetry, the new situation is Caveat Venditor. Seller Beware.

It’s not a world that is different in degree; it’s different in kind. You can still take the smarmy low road in sales, but you’re not going to get very far. It forces people to the high road.

So if this is true, that we’re all in sales but sales isn’t what it used to be, how do we do it?

We went to the social sciences and we identified 3 key qualities that describe how to be in the new world.

They’re the new ABCs:
Attunement: the ability to take another’s perspective.
Buoyancy: what do you do before and during an encounter to avoid being emotionally sunk?
Clarity: ability to cut through the muck in complex situations.

Attunement

Is largely about perspective taking, but plays by a peculiar set of laws.

Experiments on perspective taking:

Experiment 1: Two groups of people. In one, researchers induced feelings of power. In the other they induced lack of power. Then they did the “draw an E on your forehead test.” High power participants were three times as likely as low power participants to draw a self-oriented E. The higher power they had, the less inclined they were to take the “other” vantage point. Insufficient adjustment to an outside vantage point.

Law 1: Increase your power by reducing it. We have this notion that sales is about dominance, but it turns out it’s not.

Experiment 2: Simulation of a tough negotiation. 1/3 were told to imagine what the other side was feeling, 1/3 were told to imagine what the other side was thinking. Last 1/3 was control group. Result: Best group for taking the other’s perspective was the “thinking” group!

Law 2: Perspective taking and empathy aren’t identical twins, but they’re fraternal twins. So you have to use your head as much as your heart.

Humans are natural mimickers. We do it unconsciously. It’s an affinity we have as a species. And you can be more effective if you’re conscious of it.

Experiment 3: Another simulated negotiation. Groups get regular instructions, or specific instructions to mimic. Negotiators who mimicked their opponents mannerisms weresignificantly more likely to get a better deal for themselves.

Law 3: Mimic strategically.

It’s widely known that extroverts make the best salespeople. Everybody thinks this and there’s a tremendous amount of research on it, but it turns out there’s no evidence that’s actually true! There’s no correlation between extroversion and sales performance. It’s just folklore.

So does this mean introverts are better at sales? No! It’s actually more intriguing than that.

Actual research on real salespeople shows extroverts generate slightly less revenue than extroverts. But “ambiverts” did much better than both. People who show characteristics of both extroverts and introverts.

So this suggests that a capacity for selling is really pretty innate in us, because most of us are ambiverts.

Jeff Bezos exercise: “Pull up a chair.” In important meetings at Amazon, Bezos adds an empty chair at the table for The Customer.

You can do this too, for your badass user or whatever. It forces people to get out of their own head.

What to Do. The 3 Abilities needed in the new world.
Pitch: Conveying a point quickly and elegantly
Improvise: What you do when your perfectly clear pitch doesn’t work (i.e. all the time).
Serve: Wanting to do something good for the world.

Pitch

The elevator pitch is a little bit “2oth century.” Let’s talk about a new way.

The Question Pitch. We think of pitches as declarative statements, but research shows that questions can be more powerful.

Reagan: “Are you better off than you were 4 years ago?”

It’s much more effective and the science explains why. The listeners have to summon their own answer, even if they don’t say it. By making them work just a little harder, they’re more likely to come up with reasons for agreeing, and those reasons are their own so they resonate. It’s not passive for them.

It’s a little bit perilous, especially in weak cases, but in strong pitches try a question pitch.

The Rhyming Pitch.

Example: “If the glove doesn’t fit, you must acquit.”

Here’s the thing about rhymes. There’s a huge body of research that says that when messages rhyme, not only are they more memorable, they’re perceived to be MORE TRUE. They enhance people’s “processing fluency.”

Example: Haribo Candies. Their pitches rhyme in every language they sell in.

The Pixar Pitch.

Every Pixar movie has the same narrative structure, that you can reduce to a paragraph:

Once upon a time there was ___. Every day, ____. One day ____. Because of that, ____. Because of that, ____. Until finally ____.

I think you can build pitches in this structure, and I think it’s easy to do.

Once upon a time, only some people were in sales. On day everything changed. We all ended up in sales. We had to learn new qualities and skills. Until finally, we realized sales is part of who we are and something we can do better by being more human.
 


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Live from #BOS2012: “Understanding Founder’s Dilemmas” with Noam Wasserman

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Understanding Founder’s Dilemmas, Noam Wasserman

Let’s start with a happy topic: Failure.

Most companies fail. We wring our hands about it but we can’t do anything about it. Let’s accept it. However, there are some things we can learn about them that will let us move the needle and change that fact. Things we can think about that are key elements between success and failure.

What goes on in VC firms? How do they evaluate companies, do due diligence, bring founders onboard and join them, etc. What goes into being a successful investor? Research has shown that the key question is “Let’s take a look at the VC-funded portfolio companies that no one hears about. The failures. Let’s talk about those.”

Causes of Failure in VC-Backed Startups

35% of the reasons are product development, functional management, and market problems. The kind of stuff you’d guess would be the sources of failure!

65% of the reasons for failure were something else: People problems. Tensions between cofounders, or between founders and hires. For almost 2/3 of the failures, this people side was the key problem.

So I’ve devoted my last dozen years of research to understanding these people problems. How can we help startups make better decisions and avoid them?

When you’re founding, you don’t have a roadmap through these key decisions. The most you can hope for is for someone to wish you good luck :). And without this roadmap there are very natural intuitions you’ll be tempted to follow, gut, anecdotes, rules of thumb. And sometimes they’ll mislead you.

Favorite Steve Jobs quote: “Follow your heart, but check it with your head.” Those intuitions are the Heart element.

The Research

Founder’s Dilemma book has 3 dozen case studies. They inform everything. But they’re anecdotes. So we complement it with data on 10,000 founders. And we’ll see how various decisions led to success or failure of various kinds.

Phases of Core Dilemmas
  • When to Found
  • Building the Team
  • New-Venture Hiring
  • Beyond the Team
  • Exit Dilemmas
We’re going to take a deep dive into a couple of these today.

Founding Team Dilemmas

You’ve decided to make the leap. How are you going to go forward and build your venture. What’s the first decision? Go solo, or build a team.

In the tech sector, only 16% of foundings are solo. So most people build a team.

Building a team introduces choices. We call these Relationships, Roles, and Rewards.

Relationships:

Hire your friends/family? It’s a very common practice. These make up more than 50% of the ventures in the dataset. The book calls this “playing with fire.” It can build glorious teams, but it can also blow up. If you decide to found with friends & family, there are things you can do to protect yourself.

Hire prior professional relationships/all-stars? This is the flip side of the friends/family decision.

Roles & Decision making:

Peter Pan lived in Neverland. Some companies do, too. Consensus, voting, “Co-CEOs.”

Another model, is the “Zeus” model. Zeus is on top and runs the show, makes the decisions.

As you grow, if you’re in Neverland, will you have to transition to being Zeus? Whichever approach you pick, the transition can cause problems when you have to adjust later.

Rewards:

What’s the highest-tension part of the founding decision? Equity; splitting the ownership. All sorts of challenges introduced by this decision.

Individual and team tensions are heightened or reduced by specific decisions in each of the three Rs, but they’re also interrelated. If you treat all three Rs as totally independent you’ll miss these interdependencies and discover the problems too late.

Founders are human. Humans have natural inclinations to things like conflict avoidance. Elephants in the room that we avoid discussing until they start to destroy the relationship(s).

73% of founding teams split the equity at the beginning (within a month of founding). To the extent that you haven’t figured out yet how the work will get done, setting it early can be risky. On the other hand, it gets the problem out of the way. The majority of those that split equity at the beginning also set it in stone.

Example: Zipcar. Split equally. Started by two women who met at daycare. Decided to cofound together. One founder (Robin) had heard a horror story from a friend about an equity split gone bad. So Robin was panicked about this and surfaced the equity issue as soon as we could. “We shook and said 50/50, and I thought everything was great.” Over the next 18 months Robin became the heart & soul of Zipcar. Her cofounder didn’t quit her day job and contributed little. So this created a lot of tension. “It was a stupidest handshake I ever made. Who knew what skillets we would need, what milestones we’d need to hit? That handshake became a major source of tension and a major distraction for me as CEO.” So punting on this decision without having a deep dialogue created a lot problems for them.

Example: Ockham Technologies (salesforce software). Group of 3 cofounders who had worked together before. They’d honed the ability to have tough dialogues together, and surfaced early on that they didn’t expect everyone to contribute equally – different skill levels, different industry knowledge. So they crafted an unequal split that acknowledged that: 50/30/20. But they also had a deep dialogue early on about their biggest uncertainties, the biggest risks they faced. They honed in on one: Ken (the idea guy) had just become a first-time father. So not knowing his startup life, he also didn’t know his family life and a day job he liked. So this team had a deep dialogue about commitment and about who could be on board. They took a series of scenarios into their founding agreement as a list of if/then/else cases. So they captured their key uncertainties and built a dynamic split into the agreement handle them.

There are several key levels of uncertainty in a venture.
  • Is the strategy stabilized yet?
  • Is the business model set?
  • Are future skill requirements known?
  • Are future roles set?
  • Is each founder 100% committed throughout?
  • Are there personal uncertainties for anyone?
If you don’t have all of these answered, research shows a dynamic split reduces tension and increases the chance of keeping a great team.

Capital Requirements.

Two major ways to do it: Bootstrapping and Funding. Each leads to a bunch of ripple decisions.

Source of funding. Smart money vs. dumb money. Do you want money from people who have been there before, and who will try to steer your business even if you don’t like it, or do you want “dumb” money from people who don’t understand your business and will stay out of your way.

The Board. Controls decisions like who is going to be CEO, etc. Big decisions. The choice you make about capital has huge implications for how these decisions at the top of the firm happen.

Example: Wily Technology. Lew Cirne built a 50-person company and was able to raise 2 rounds from top VC firms. Revenues up, losses down. Lew’s reward: Fired. Had a pretty typical technical founder path, worked at Apple & Hummingbird. Was given 6 months to resign by one of the investors. First reaction was bafflement. Jack Dorsey (Twitter) described being fired as CEO as “Being punched in the stomach.” But as time evolved, Lew got over the shock. Negotiated to have veto power over his successor.  6 month search for a replacement becomes nine, then 12 months. After 13 months, they find a successor. Then the successor has final demands: way more compensation than Lew, and wants Lew to resign as chairman. Lew took the deal and Wily took an exit a couple years later.

Looking at the data on this, the rate of CEO succession increases after things we generally see as big wins:
  • After product development is completed.
  • After raising a new round of financing
  • etc.

What we’re really celebrating at those events is actually the chance our founder/CEO will be replaced.

“If the company tanks, I’m gone. If it’s a big hit, I’m also gone.”

The Rich vs. King fork in the road. To become king by having more control over a small player, or become rich by having less control over a big player.

So these decisions lead to cumulative effects on the founder’s control over the company, and they have long-term effects that aren’t obvious at first.

What is motivating me to go and do this? Would I be more excited to give up control and be richer for it, or would I rue the decisions to give up control and rather celebrate being king of what I’ve built?




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Live from #BOS2012: “Building a World-class Culture in Three Easy Steps” with Mikey Trafton

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Building a World-class Culture in Three Easy Steps, Mikey Trafton

About Mikey: Not a book author, not a tweeter. Just an entrepreneur on my third company. We sell software and consulting to BFCs (Big Freakin’ Companies). We’re basically a services company.

I’m a bootstrapper. No external funding. Goal is to become profitable and cash flow positive ASAP. I swear a lot. If you have delicate ears, apologies in advance :).

Culture.

Most companies have a split personality. Sometimes when you deal with them they’re nice; other times they’re jerks. This is a reflection of a weak culture, and a company who’s essentially hiring random people.

Great Culture = Great Place to Work. It’s only a great place to work, though, for people who FIT with the culture. For everybody who doesn’t fit, it probably sucks. A good culture attracts people who are a culture fit and repels people who are not.

With a great culture, you’ll attract better employees, they’ll stay with you longer, they’ll stick with you through hard times, and they’re cheaper.

If you don’t design your culture, your employees will do it for you. And they suck at it. It’s your company, you get to have the culture you want.

Culture Trumps Money. 

1. Decide what you care about.
2. Hire people who care about those things.
3. Pay attention to those things.

Decide What You Care About

In your business, this is the one time you get to act like a king. When it comes to customers, etc., you have to win people over and make nice, but when it comes to culture, you’re the decision maker.

Think about the place you want to work. But also think about what’s the kind of place the people I want to work with want to work.

Core Values. It’s a cheesy 80s management consulting term, but it’s still important and has a lot of impact. Think about what your strengths are, what people/customers admire in you. But think about what you admire in other people – what makes them so special. Those are “aspirational” core values.

Values of Bluefish:
  • Client Focus.
  • Teamwork. An elite team, not a team of elites.
  • Accountability.
  • Excellence.
  • Communication.
4 of these are my strengths, but Accountability is NOT. Putting that in the core values, however, drives Bluefish to fill in holes and backfill where Mikey is weak.

Make it real. Make the values concrete and tangible. What would your culture be if it were true that the only thing that could get someone fired from your company is if they violated the culture?

E.g. You are a culture fit if…
…you do more for others than you do for yourself.
…you love your job and are really good at it.
…people like having you around.
…you’re not scared of a little hard work.

Hire People Who Care About The Same Things As You

Generic interview questions:
  • Describe the culture at your last job.
  • What do you expect from other team members?
  • What behaviors are you unwilling to tolerate?
  • What does [core value] mean to you?
Weed out questions. People are really good at “interviewing” so you need to offer some “land mines” that identify cultural non-fits. Doesn’t mean the candidate is bad, just means they don’t fit and should work somewhere where they do fit.

Pay Attention to the Things You Care About

You’ve decided what you want and you’ve hired for it. Now you need to make sure you and the team delivers on what you want.

You will get from people the behaviors you tolerate.

Ringing the “good news” bell:
  • When we close a deal.
  • When we deploy for a customer.
  • When someone accepts a job offer.
So Does This Stuff Work?

Running an experiment this year to see how much success is dependent on Mikey vs. the culture itself. So I fired myself. I don’t work at Bluefish anymore and turned the company over to the employees. I still own it and I get checks :), but the team is in control. Without me, but with the awesome culture, the team has doubled revenue and profits are up 500%. So that’s nice!

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Live from #BOS2012: “Coding is the Easy Part!” with Peldi

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Coding is the Easy Part, Peldi, Founder, Balsamiq

Who’s Peldi? Used to be a programmer bee at Adobe, decided in 2007 to move back to Italy and start his own thing. “Micro-ISV” was the big thing back then – let’s make a small software product & company to feed himself and the family. Since then, Balsamiq has grown to about $6m in revenue of which $3m is profits!

Peldi’s Law of Learning. Learning is a roller coaster ride. For brief moments you think “Wow! I’m smart and can share my knowledge!” but then you immediately realize you’re not really that smart.

Epiphanies encountered during the growth of Balsamiq.

Vision. At first you think all you need is a genius idea. “I have this idea but I can’t tell you because it’s so valuable.” It’s common knowledge, though, that the idea isn’t worth much by itself – you’re probably not the only one with your idea. You need a product. So you build a product, and you think THAT’S all you need.

But it’s not. You need marketing because if nobody knows or cares, nobody buys it. Lean startup/customer development is a big thing and it’s good, because customer development is just as important as the vision.

So you do those three things right, and now you have customers. Now you’re doing support. All. The. Time. So support is actually just as important, too. So you hire people to help with that.

And now you’re a company. This new thing you have to deal with that requires your attention. And it’s just as important as the other pieces because it’s fragile.

Then with all those things, it’s really STILL not a defensible competitive advantage. You need an ecosystem of partners, vendors, community who root for you to be successful. A company with a strong ecosystem is harder to beat than one that doesn’t.

These 6 things are all EQUALLY important. That was the biggest epiphany of all in building Balsamiq. There are books and books about many of them, and today we’re going to talk about Ecosystem and Company.

ECOSYSTEM

You start with the Founders, but when you get employees it adds a layer of complexity. Then you’ve also got the lawyers, accountants, payroll, etc. These are important roles – they protect you from yourself. You have to think of these people as extensions of the team. Add to that contractors, vendors, partners, channels, and competitors. Competitors are an extension of your company in the sense that they influence some of how you behave and no matter what you do they’re going to be there.

Externally to your company, you’ve got your website, your CMS, your blog(s), forums, UGC, teaching resources, etc. It’s all the “same website” but it’s on like 7 different servers/platforms. On top of that, you add Twitter, Facebook, LinkedIn group(s), Google+ (if we’re being generous :) ), other blogs/guest posts, evangelists, and if you’re lucky you have a cottage industry of people who extend your tools with plugins or extensions or the like. Finally, then you have your New Friends who you meet at places like Business of Software!

So you have to embrace all of this ecosystem. If you don’t, the whole thing basically doesn’t work. All the interconnected relationships are just as important as the product development and marketing and support.

“Surround yourself with excellence.” Make yourself the dumbest person in the room. Get the best lawyers, accountants, vendors you can. And play nice with them. They’ll play nice with you.

COMPANY

Growth needs gardening. If you want to grow organically, revenue/employees/PR/quality all need to grow together. (See Joel Spolsky’s article “Four Pillars of Organic Growth” from 2008).

Company Values. Pick your battles, and deliver. For Balsamiq these are Usability and Customer Service.

Company Policies follow from the values. These are documents on the Balsamiq wiki that describe how they do their work. Goal is to have as few as humanly possible. It’s easy to ADD policies, but HARD to take them away. Be careful what you add. Like 37signals says, don’t scar on the first cut.

Policies are never frozen. They will never be final. If they’re frozen, you’re frozen and you’re dead.

Always explain the WHY of the policies. Explain (concisely) the reasoning behind them.

Then, why leave them on the wiki? Why not put them on your blog? Ask your community what they think of them.

Main goal of the policies is to keep everyone on the same page. Policies aren’t for the sake of having a law, they’re for the sake of helping everyone understand why things are the way they are. They’re also very useful for new employees: “Read the whole wiki, you start tomorrow.”

Example Guidelines at Balsamiq…
Pace > Deadlines. We’re all mature. If you give a person their dream job and ask them to go fast on their own, they’ll do that. Everybody can go in 3rd or 4th gear, but not 5th or you burn out.

Vacations. TAKE SOME. We can’t afford to have you burn out.

Salary. Heavily inspired by Daniel Pink. Remove the money form the conversation. We pay our employees better than the same job in the same geographical location, so they don’t worry about money. Worry about the work.

Profit Sharing. The formula is interesting. 10% of profits from previous quarter, split among employees. 25% of that is equally divided. The other 75% is based on seniority so new employees get something and the whole thing levels out after about 5 years. It’s not based on job titles or skills, because we think everyone contributes equally to the company. We don’t have equity or shares because I haven’t figured out how to do that right. If the company does well, the company does well. For some employees the profit sharing is nearly equal to their base salary.

Donations. Employees are given money earmarked for donation, that they can contribute anywhere they want.

Other Guildelines.
  • Sales support bible.
  • Setting up a new dev machine. PLEASE tell me you have this :).
  • How we do dev & QA (branching, TDD, etc…)
  • How we communicate. Hipchat, Skype, Google Hangout.
  • How we do support. It’s better to let a question sit while you find a perfect answer than it is to answer immediately only to say, “Hold on while I look this up.”
  • Website Style Guide.
  • How we use Twitter.
  • Sponsorship Guidelines.
  • How we let people go.

Time Saving Tips.
  • Awards. One day someone is going to “give you an award.” They’re meaningless and they want you to pay them anyway.
  • PCI Compliance. PCI compliance charts are intended to terrify you. They have documents just to help you navigate other documents. There are people whose entire job is to “assist” you with this, in exchange for your money – it’s like the mafia. The only valuable thing about it is we got a “compliance policy” document template.
  • Dealing with VCs. Just because we sell stuff on the internet and we’re programmers, we’re supposed to be in the same league as Facebook. VCs and the press are confused about this. All the calls are the same. They happen a couple times a week. We have a standard template reply to make them go away, but be nice to them. People gave them a lot of money that they need to invest, and they’re not used to being told to get lost. Ask Peldi if you want his template :).
  • When to Hire. A couple years ago, I said “Wait until you think you’re going to die.” Now I feel differently. Start earlier so you have more time. Give yourself a chance to find the best person. If you have a good cash flow, start looking so you can take 3 months or whatever to get someone.

The Pledge
I, <your name>, hereby solemnly swear, that I will never, ever, ever, rush a hiring decision.

Do not underestimate the importance and difficulty of growing a company the right way. It’s harder than coding, because it has to do with people and nobody prepares you for this at all. But everybody has to go through this. If you have competitors, they’re going through it too.

Our Current Challenges

Peldi is the bottleneck. I’m the CEO and my job is to ask people what they need. And I love that. But if I have a one hour meeting with each employee every day, that’s a full time job. So now I probably need managers, but I don’t want them!

So we have Valve Envy. They have this beautiful employee handbook and they make us jealous. So I made a wiki page about “Balsamiq 3.0” with links to companies we want to be like, Valve included.

Recurring themes in flat organizations: self-organizing teams. Internal recruiting. People are encouraged to make few commitments, because they’ll tend to overcommit if not reminded. Not job titles. Etc.

Clearly we’re in over our heads, as usual. Is it worth it? But I think about the 6 epiphanies. If every wedge if that pie is just as important, why not give it all you’ve got in each one?

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Live from BOS2012: “Founding Principles vs. Scaling Principles” with Peter Bauer

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Founding Principles vs. Scaling Principles, Peter Bauer, CEO, Mimecast

4 Principles that have supported the founding & growth of MimeCast:

  • Building something with Friends
  • Deal constructively with my fears about success
  • Never allow an investor that would change the chemistry
  • Clear intent & logistics
Mimecast, founded in 2003 to look at business information management and email. Story of MimeCast is more a story of Endurance than of Brilliance.

Just closed a new round of $62m funding. Will allow to grow from ~350 people to double that number, and up to 5+ million customers as well as from $70m to hundreds of millions revenue.

It will also test us like we’ve never been tested before, and will draw fearsome competition to the space. Despite the investment, it leaves the management team to be in control of our own destiny and gives us the opportunity to compete together at the next level. We all love the opportunity to wake up in the morning and know we’re working on our own terms and following our own passions.

That’s the first principle: Build something together with friends.

Before starting Mimecast, New Year’s 2001. Thinking about the next phase of life, and a remarkable idea occurred. So I said, “Hey guys, why don’t we all start a business together, and work together as friends!” Everyone said, “Hooray!” and went on drinking.

But I woke up the next morning and the idea stuck with me, and it seemed a good idea to do just that. So over a year later, Mimecast was born. Most of the friends that were there when the idea was discovered now work for the company. And many more friends now work for the company, and have brought their friends along as well.

We pass this spirit along to our customers and our partners.

It’s not a picnic, though. We’re deadly serious about success and making each other successful.

The end result is a culture of friendship, and remains that way today.

The key question for recruiting is “Can this person act and work with us like a friend?”

Building this kind of business requires confidence, and fear undermines that. That brings us to the next principle: Deal constructively with my fears about the implications of success.

From the time we started Mimecast, the fear of not succeeding was always present. Startups are fragile things. But the far more restrictive thing was a fear of success. I can remember my wife asking me what would happen if Mimecast got big, what would happen to the family? This, and the fear of the consequences of prioritizing business tasks over family, were ever present.

This is common: great success is easy to fear. But the reality is success brings many options. The eventual outcome was that success allowed me to move to the US with my family.

Another component of fear of success is that success changes the nature of the business, and the nature of the founder’s role. “Am I a real CEO?” is the question that creeps in. At the time Mimecast was founded, there was a strong sentiment that founder’s can’t scale. Conventional wisdom was that investors wanted to install “proper” executive teams in their companies. This was borne out in some of the term sheets we rejected. But our prime desire was to maintain our own control over the direction of the business.

This even goes beyond the founders as you grow. The whole leadership team needs to understand and not fear success.

The third principle: Never allow an investor to change the chemistry or assert their agenda above that of the company.

Shareholder interests must come a distant second to the interests of the company. Company interests include the company, employees, customers, families, etc. This makes many investors very uncomfortable. But writing the check doesn’t make them right.

Angel investors provided a better way. We built a network of a few dozen angel investors around the UK. They provided a form of patronage for us. It wasn’t for everyone, but we raised over $10m in small increments this way. Each of these angels is now substantially in profit for having supported us while we found our path in an intuitive and responsible way.

The biggest advantage this method of funding gave us was that when we finally brought in bigger VCs, we’d proven we knew how to build a business. We were able to credibly assert the interests of the company above investor interests.

Fourth principle: Clear intent and logistics.

Just participating is not intent.

Real intent creates a power multiplier. You can see this in many sports. It’s surprising how many teams and companies operate without proper intent. Exhibiting potential but really doing very little with it.

So participating isn’t intent, but you do need to participate. The key is to have a purpose. It may take time to formulate an intent, but you need to find it if you can.

For us, sales targets became the language of intent. It gave the sales teams a power multiplier in our business. Sales was working for “their number” and this allowed others to invest energy in helping them achieve that number. Sales was proactive, and the rest of the business became reactive to those goals.

We got to a point a few years ago where the non-revenue-generating functions were actually apologetic to sales for anything they did that took away from resources for sales. It started to reduce our ability to change as we grew, even though it looked successful.

Systematically, we started to talk to the non-sales groups about their sovereign goals and we put marketing & systems goals higher on the agenda. We put strategic programs on the list and discussed the significant impact these could have in the long term.

Then we defined “AIM Factors” (Actionable Intent Matrix) which forced groups to define their intent in a concrete way. That gave our teams an intent-driven focus that could counterbalance against the goals of the sales team.

The AIM Factors defined the “supply chain of success.”

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Live from BOS2012: “The Cultural Anthropology of Stack Exchange” with Joel Spolsky

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

The Cultural Anthropology of Stack Exchange, Joel Spolsky, CEO, StackExchange

StackExchange is roughly the size of Texas on the Internet.

Building a site with 25 million users is an exercise in cultural anthropology.

Back in the olden days, it was enough to get any answer out of a computer, but as connection speeds increased (from 300 baud to 9600 baud :) ) people got the idea to send messages to each other through the mainframe. So email and Usenet were born.

Usenet culture was born out of thousands of tiny decisions made in the Usenet software, some by choice and some because there was not other choice. Usenet was in the 80s, there wasn’t really client/server yet, so every node had an entire copy of everything and used store & forward to sync. This meant you could never be sure if everyone in the discussion had read what you had read. This is where quoting of messages came in handy.

Then we moved to the whole generation of online discussion forums & software. phpBB, etc. It’s still threaded, with topic groups, etc. The behavior of users in that scope is still similar to what evolved/emerged in Usenet, even though those behaviors were sort of accidental.

We don’t need to do that anymore. We know we’re going to build a culture, so let’s think of every single aspect of that and design for it. That’s StackExchange.

We designed StackExchange for the cultural anthropology we wanted from the users.

Major Principles of StackExchange

StackExchange is one of the few sites that’s designed to drive away the wrong kinds of users rather than attracting everyone.

Voting. Provides peer review.

Reputation. Provides recognition. When you first join the site, you get 1 reputation point. Over time you accumulate reputation and features. Bronze/silver/gold/platinum; at 10k reputation you get a little drop shadow on your avatar and the ability to customize bits of it.

Badges. Users can acquire badges by providing certain services or tasks. You’d think nobody would strive for badges, but an interesting part of cultural anthropology is that as soon as people think someone is noticing what they do, they work on it. If users think someone else cares about the badges, it turns out they work on them. We use this to encourage users to do certain things by providing badges that recognize those behaviors (e.g. answering your own question).

Government. Every culture has government. We try to put as many of the policing/governing responsibilities on the users as possible. As you earn reputation, you gain capabilities related to governing tasks.

meta.stackoverflow.com. Special communities for talking about the communities.

Closing questions. The most popular pages on StackExchange, it turns, out, are not actually useful to people. StackExchange is also not an open discussion/chat forum about anything.

Q&A

Q: If you have a question that gets marked as closed/inappropriate/not a question, what makes people will actually read the reason?

A: Closed questions aren’t indexed by search engines, and they don’t hang around on the site very long, but they’re displayed on the homepage for a while.

Q: If you were going to take the lessons you learned from StackExchange could you boil them down to one Rule For Startups?

A: No :), other than to say that cultural implications matter a lot. You may think that “login”/”signup” terms or where the page scrolls to when you reply are technical decisions, but everything you do is creating a culture.

Q: At one point you productized StackExchange so people could start their own sites, then you took it away. Are you considering productizing it again?

A: We learned a whole bunch of lessons by doing that. First there was StackOverflow, then ServerFault and SuperUser. That was “the trilogy.” In trying to figure out how to get more sites, we decided to license the software. It turned out there were not a lot of people who had the ability to create sustainable communities (~200 active users). Another thing we realized was the value of a community is in the community, not in the software that powers it. We realized the software was not a sustainable competitive advantage – anybody can code another StackOverflow. The community population, though, is a HUGE and non-disruptable value. Nobody can create another StackOverflow community.


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Live from BOS2012: “Building a Minimum Badass User” with Kathy Sierra

“Live” notes from Business of Software 2012 in Boston, October 1-3, 2012. See all my notes from Business of Software 2012 by clicking here. Feel free to use these anywhere, but please credit me if you do.

Building a Minimum Badass User, Kathy Sierra

So many economies: the attention economy, the female economy, the Facebook economy, even the MySpace economy.  (pinterest, etc., too) It’s impossible to “compete on all these.” How did we get in this mess?

We want our products to be desirable, but we NEED them to be SUSTAINABLY DESIRABLE.

What’s happened in the last few years is the emergence of “desirability engines” and the like. It’s based on the idea that people like to “engage with brands.” But we don’t have an ENGAGEMENT problem. More engagement isn’t the answer. In fact trying to get people more engaged with the brand actually harms the brand in most cases.

Gamification is based on operant conditioning. It’s literally the same thing as the rat in the Skinner Box. It’s the same thing responsible for slot machines and cocaine. It’s not loyalty, it’s bribery.

We need to be sustainable desirable WITHOUT having to bribe, incentivize, coerce customers.

So what does it mean to make something sustainably desirable? What are the key attributes?

GP;DS “Great Product. Didn’t Sell.” History is littered with great products that didn’t sell.

So if it’s not quality that drives desirability, what does?

People trust reviews from family and friends. Also online recommendations. It’s word of mouth.

So what drives WOM? What makes people say “This brand/product/service is awesome?”

The user’s goal is to BE AWESOME. Companies frequently want to be PERCEIVED AS AWESOME. These are two very different things, and there’s a very small overlap between them.

Compete on User Awesome, not App Awesome. Being viewed as awesome is a natural side-effect of making your customers awesome.

The key attributes of a successful app live in the User, not in the App.

So desirability is about User Results.

The bar for App Awesome is really high,and it’s noisy and bloody underneath it. The bar for User Awesome is amazingly low.

Making User Awesome is NOT LUCK. And it’s not quality or marketing. It’s a focus on making the User Awesome.

It’s not about making crappy software, of course. It’s about focusing your resources differently – on User Awesome.

And by “awesome” we mean “badass.” Because the word “awesome” is too easy to apply back to the company again. There’s actually science around the concept of “badass.”

So really, the fundamental way to think about this is User Badass. They’re using your app not because they like you, but because they like themselves. And they’re telling their friends about you not because they like you but because they like their friends.

Your product is just a tool.

What does the user DO with or BECAUSE of you? What bigger things do you enable? Nobody’s goal is to be “badass at your tool.”

Be aware of how you treat customers before and after they give you money.

It’s dangerous to replace glitzy “you’ll be awesome” marketing literature with dry and bland manuals, etc. The problem isn’t that they’re bland specifically, but that they don’t address how to make the user awesome – they focus on the product.

The only thing that matters at the end of the day is what happens when the clicking’s done. Don’t design for your users, design for your user’s users. How can you make your users more interesting at work, or more interesting at a dinner party?

Making your user badass has the side effect of sustained word of mouth.

The Science of Expertise

“Given a representative task, experts perform in a superior way, more reliably, than experienced non-experts.”

badass = reliably superior performance

Don’t confused badass with “jackass” – one single act of extreme brilliance (or extreme risk) does not make expertise.

Myths of expertise

Expertise comes from more knowledge.

Expertise comes from more experience

Expertise comes from natural talent.

After 18-24 months, years of experience is a poor predictor of future performance.

The 10,000 hour rule isn’t about 10,000 hours. It’s about 10,000 hours of doing a very specific type of thing.

Becoming badass takes THREE things:

  • Models
  • Edge Practice
  • Forward Flow
See K. Anders Ericsson and Edward Deci. Also “Drive” by Daniel Pink. It’s the best summary of self-determination theory. Also watch his TED talk. Also “The Talent Code” by Daniel Coyle.
 
Step Zero: Define badass for your thing.
 

Given <representative task> an expert would <perform better in some way>.

Now that you know WHAT badass/experts do, you just how to know HOW they do it. Easy, right? :)

This is the curse of badass. Experts frequently don’t know how they do it. “I just know….” or they think it’s somehow obvious. It comes from deep intuition, which is hard to describe. Our brains do things above our security clearance.

If you could do one thing to make your users more badass, provide them with repeated exposure to the performance, process, and results of badass users. (models)

Most people could learn better by literally staring at experts and the result of expert work. The more experience you have with mediocre examples, the more likely it is for those examples to become burned in.

Brains can acquire deep perceptual knowledge and skills more effectively we we STFU. See “doing with symbols” by Alan Kay.

If you could do two things to make your users more badass, add a progressive series of exercises, each designed to build a fine-grained skill within 1 to 3 sessions. (edge practice)

Edge / deliberate practice is NOT the same as tutorials. High-quality, low-latency feedback. Example: play this short musical passage with no mistakes, at this speed in this key.

If you could do three things, add a clear, believable map that shows the growth of skill toward expertise. See the degrees of martial arts mastery for a good example of this.

Provide a “motivational GPS” to keep them moving forward, especially when it gets tough.

There’s one thread that drives all this. It’s the most crucial design point of view.

Cognitive resources are scarce, limited, and easily depleted. We should be managed cognitive leaks wherever we can. This is also why we get end-capped at the supermarket at the END of our shopping trip, not at the beginning.

This tells us we should to “cognitive-resource-driven design,” which is a hard thing to say, but it means things like, “Being overwhelmed by choices is a huge leak.”

The best mentor says, “I know what the books say, but forget that… here’s what REALLY matters…” There’s something where you’re an expert, and you KNOW everyone else looks in the wrong place. The more your product can point people to what really matters, the better you serve them.

How to be instantly badass. Stand like a superhero. We know this experimentally – posing like a superhero increases testosterone and reduces cortisol.


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Live from ISUM11: Fireside Chat with Noah Everett / TwitPic

Note: See all my notes from Internet Summit 2011 by clicking here.

Notes from Internet Summit 2011 in Raleigh, 2011-11-16.

An Interactive Fireside Chat with Noah Everett, Founder, Twitpic

Q: Let’s talk about TwitPic. How did it start, where did you go?

Noah Everett: It was 2008. It seemed like a good shortcut to share pictures, I stayed late at work with some Red Bull and wrote it over a weekend, and launched it. Then it got picked up by blogs and media, and went from there.

Q: When did you realize it could be a business?

NE: In 2009, one of our users took a picture of the plane in the Hudson and TwitPic’d it and it exploded. We had one server at the time, and it melted. I realized then that TwitPic wasn’t just a photo-sharing tool, it was for breaking news, etc. We’ve been running ads since 2008 and run at about a 70% profit margin, which has allowed us to not take any funding. We have 7 employees counting me and Mom & Dad.

Q: Where do you see the micro-blogging space going? What are some uses for microblogging that people maybe haven’t heard of?

NE: I separate it into Facebook (private) vs. Twitter (public). Twitter is just a great way to share openly what you’re doing without having to log into Facebook and have that network.

UNICED uses TwitPic a lot because they’ve found that their tweets get a lot more exposure if they include pictures of people they’re helping.

Q: How have you been impacted by Twitter’s own photosharing app?

NE: Twitter’s a great company. We were blindsided by it and we wish they’d communicated better with their outside developers there. But we haven’t really noticed a loss of traffic or growth, so we’re happy.

Q: Tell us about Heello.

NE: We really rushed to get it out. It’s very much a Twitter clone right now, but next year you’ll see it really change. We’re working to make it more location-based, so you’re seeing information based on your area.

Q: Any advice on how to get a new app noticed, other than waiting for another Hudson plane crash?

NE: First and foremost, build an app that solves an issue for people. For getting exposure, make sure your app can share to Twitter & Facebook, and let your users promote your app. Make the barrier to entry as low as possible for your user.

Q: You get some interesting pics through TwitPic. Any interesting ones?

NE: Ashton tweeted Demi’s Moore’s butt. The funniest are celebrity ones. We’re running a thing for Movember now.

Q: What’s your advice to other startups re: taking VC funding versus growing organically?

NE: You’ll get approached by VCs as soon as your app gets started. My rule is “If you don’t need it, don’t take it.” We’ve talked to a lot of them, but we can’t figure out what we’d use their money for, so we turn them down. That means we still control the direction of the company.

Q: Give us a sense of the metrics that pass through your servers.

NE: We process about 1 billion requests a day. We try to be really smart and lean with our servers - we have about 50 of them. Amazon S3 is our primary data storage. Somebody from Amazon told us we were accounting for 1% of all Amazon S3 data storage last year.

Q: 5 years from now, where do you think Twitter, Facebook, etc. will be?

NE: The biggest challenge now is curating the data you want to see. Making it more integrated into our daily lives so we can get past the “following too many people” problem.

Q: What problems or successes have you had with Amazon?

NE: There are cheaper solutions out there now, but overall their service is the best and we’re happy with them. That said, we built our system to failover in the case of downtime, but that’s kind of not a problem anymore.

Q: Are you looking to recreate the old Twitter Developer Love with Helo

NE: Definitely. We’re trying to be upfront about where we’re going. Our API is live but we haven’t launched it yet. Hopefully we’ve been clear about what areas we’re going into so our developers don’t get blindsided.

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