Monday, February 28, 2011

Launch Lessons: Disrupting Networking - and a crazy idea how to go further

At the Launch Conference last week, one of the best lines of the opening day was host Jason Calacanis informing the participants "We figured out how to make Wifi work at a conference - we ran it over ethernet". That got a good laugh from the technical folks in the crowd, all of whom were pleasantly surprized to find that every seat in the main hall had an ethernet connection.

See those white cables? That's right, we all had Ethernet.
That's right, about 1000 ethernet drops in the main conference hall, so the attendees could tweet, facebook, blog, flickr, and generally get the word out. This isn't just about knowing your audience, it's a brilliant marketing play to help promote a first time conference. Trending on Twitter? Absolutely, both days. Real time blog posts and flickr streams? You got it.

Now, it would have been easy to just provide good network connectivity to the press, which would have gotten some of the word out - but if you still think that in this world of high tech, angel investing, start-ups, and business that marketing and social value is in the hands of the few, wouldn't get this point anyway. 

It was the best use of marketing dollars at a conference I'd seen in a long time. Which got me to thinking, can that be innovated any further? Here's what I came up with, and beat about with the gentleman sitting next to me on the first day, Joe Dileo.

Let me start by saying, I don't work in the telecom space, and I have no idea if the cost structures can support this - but if you know these things, leave a comment below. I'd love to learn more about the viability of the idea. For the record, I don't plan to do anything with it, I'd just like to learn.

The Idea
Every person attending the conference gets a Verizon (or insert operator here) USB wireless device, free, for attending the show. In addition, you get the first seven days, free - enough to clearly span the conference, as well as for you to check it out at your hotel.

We immediately have three "feel good" moments for Verizon and the show - I cannot believe this show got me a free device for the week, I'm saving some money not paying the hotel for wifi/network, and, I get a good network connection at the show - and to top it off, the 30% who are flying home also just saved on their airport connectivity solution. Win, win, win, win.

I think the numbers could work, although I do not have the details to prove that. These are rough numbers, but try this out:
  1. Jason said he spent "about 100k on networking" for about 1,000 people.
  2. The cost of a device without a plan is $249 on the Verizon website. You can get it for $99 with a two year plan ($149.00 hardware and additional $50 online discount).
  3. Let's pretend we can get  50% of the show to sign up for offer and an overall conversion of 30% to the 2 year plan.  
Therefore, we have 500 people take one for the 7-day offer (the rest of them have one, don't like the internet, work pays for it, or hate free stuff): Cost to supply that hardware, retail, is $124,000.

Of that, lets assume people that don't convert (200 of the 500) don't even return the hardware, worst case. So sticking with the retail numbers, that's a loss of $49,000, or half the cost of what Launch paid for networking. Again, I'm comparing retail numbers for Verizon - so the loss is not anywhere near that. You could do something like require a credit card before getting one, charge if not returned - but let's go with a more open, good-will approach. It's easy to layer on those vehicles later, if necessary.

On top of that, it means that they got 300 new subscribers - I'm pretty sure that even the top store in San Francisco does not sell 300 in a day or two day span - so isn't that worth it to some operator, if we can smooth out the numbers?

Even more disruptive, I want to BUY their impulse by waving the $99. I'll immediately show them online (with their awesome new modem) that this is the best possible price they can get and focus on getting people to sign up for two years. I'd use the tribal/group feeling of tradeshows, events, conferences to say "this is just for you, because you are part of this amazing event".

The alternative of course is making them sign up before the show, but I think that's a bad idea, and you loose the selling influence of the tribe saying "this is the best deal ever!" I think you can loss (and profit!)-share with the conference  to let people try it out first, and get some excitement around that, rather than the feeling that I've got to buy it first - make this different than the store experience.

Again, I have no data on conversion metrics for this space, or real cost data, but it feels like there is something here. I've not even touched on the marketing angle for the show and for the provider, other than a brief mention of the positive brand association that can occur.

It would seem you could become the one that solved the conference networking problem, and there are no shortage of conferences and conference attendees. Thoughts? Insanity? If you have any information on this space, the possible data or margins, or related comments, I'd love to learn from you.

If you don't agree there is a problem, check out this tweet from the Game Developers Conference (#gdc), going on now, in San Francisco.

Tuesday, February 22, 2011

Eat your own dogfood (pairs with Merlot)

In the last hour, the tweet from @danmartell  reminded me of the most important lesson I've ever learned -  and learned the hard way. Ironically, I also heard something similar from @jason Calacanis last week at the Startup Grind meetup.

Dan's words are below, and Jason's words were "if you and your team don't use [your products] everyday, something is really wrong", and he went on to talk about how he made excuses for Mahalo 1.0 on why he didn't use it, but the signs were all there that there was something not right with Mahalo 1.0, and the key was that he wasn't using it everyday. It was a very honest and enlightening discussion, and brought back memories. You can see Dan's similar comments in this picture:

If you are not using your product, you're dead-company-walking.

Although it's often attributed to startups, the honest truth is, it happens to everyone. My experience was during my time at Apple - yes, that Apple - even Apple built stuff people didn't want, once upon a time.  I'm not going to bore you with my personal backstory, but I was at Apple as a 20 year old, first working on MacApp (not the new MacApp, but a C++ framework for applications), even getting to speak about it on stage at WWDC. I then transfered over to be a tech-lead on a OpenDoc subproject called A.L.O.E. (Apple Library for Object Embedding).

Jokes about naming aside (ALOE? Remember, this is the company that brought you iPad), these were both killer jobs, where I worked with the most amazing people directly and indirectly, got my ass kicked when I wrote crappy code, and learned to be a "real" developer.

MacApp, as you can see from the Wikipedia article, had a long and successful history that I'm proud to be part of; OpenDoc - which I'm also proud to be part of, was also full amazing people, great idea, well funded, and even the same floor of the same building as the MacApp team. OpenDoc was, idea-wise, well ahead of it's time, and can be seen, conceptually, be found in most current technology. Just last year, O'Reilly posted an article about how the ideas of OpenDoc would improve the iPad experience. It was an amazing project, full of immensely talented people. But it's life was short.

I should be clear, I was not part of the core OpenDoc team like I was for MacApp3, so my point of view may be a little different than others; ALOE was a subproject. Despite what the people say about OpenDoc's failures, I think the biggest issue was we didn't use OpenDoc, or any of the products our developers or customers created.

When someone says your product is slow, that's a pretty good sign you are not using it everyday.

Sure, a few people used Cyberdog, but in general, the team didn't use OpenDoc parts such as WAV to keep meeting notes, we used Microsoft Word. We didn't use Numbers and Charts, we used Excel. None of our Apple internal tools (such as Radar, our bug tracking tool, built in...MacApp) was adopting OpenDoc.

We didn't build applications or parts we used every day, but we build a lot of demos. We should have used, every day, the things Thomas Wiesbach (and Steve Smith's team, if I remember correctly) developed; we should have built things we used (ala 37signals). Instead, we made demos and demo code. I was no better, I should have been building mashups showing how to use the tools in way I would use them, everyday, but I did not. In retrospect, it felt more like a science project to me than a product development process.

In retrospect, and worst of all, we didn't support our developers by using their products, by giving them usability and product feedback. We interacted with them in marketing and  technically (and our support team was great for technical bits), but not religiously, not as a band of people all trying to change the world. Culturally, we got that wrong. That should have been part of our manifesto, like it was on the MacApp team, where we constantly created applications, got into the developer community every day, and "ate our dogfood."

Claris did make some noise, nothing shipped, unfortunatley. If you read that linked closely, you'll see that there is Apple's wholly-owned application arm, Claris, saying "OpenDoc doesn't fit our business model". Um, time to listen to the customers! That said, there is argument that Claris actually didn't like the product technically, and Apple tried to force it down their throat. I wasn't part of that directly, although I did support Claris in some Object Embeding. In particular, Tantek (a very smart guy, by the way) moved mountains for Object Embedding and Claris. In the end, I have no idea if this is accurate or not.

When Steve Jobs came back, he specifically said "we put a bullet in OpenDoc's head".  It cost me my [at the time] dream job, as nearly the entire team was let go. The good news is, I learned a lesson very early on that I've tried to apply to every startup, every project, every idea since then. Sometimes it's hard. Sometimes you are building something for someone else (like we did with the Health Buddy), so you need to find a proxy, and do endless UX review and user feedback.

But you can't over look the simple fact - if you don't use it, why should anyone else?