Oct
20
Memo #15 — Blodget says: Online Display Ads Will Fall Sharply In 2009. I say “Good”
Filed Under Business, Internet, Startups | 4 Comments
Henry Blodget things we’re fucked in his recent article: Let’s Be Serious: Online Display Ads Will Fall Sharply In 2009
I don’t think we’re so screwed. I do think he’s right that display advertising will drop, but only for a while.
Jul
25
Memo #12 – Tackling the hard problems
Filed Under Business, Startups | 2 Comments
In a conversation with a friend yesterday, she made the generalization that the engineers at her small startup don’t seem obligated to tackle the hard or tedious problems even though they need to be tackled for company to succeed.
I’ve heard that claim before. In fact, I’ve heard both sides of it. I’ve heard engineers complain that the non-engineering side of the house isn’t doing anything to help the business and I’ve heard the non-engineering side complain that none of the engineers are doing anything to help the business. I’ve never seen a situation where either of those assertions was correct. I told my friend that whenever I’ve been confronted with this problem it has always been a symptom of a larger organizational problem relating to a lack of clear strategy and goals. I know this because I’ve been responsible for creating problems like this (and hopefully fixing them).
If you believe that people on your team generally want to do a good job and be successful then hearing people groan about other people not working is a good indicator that your team is unclear on the objectives or aren’t working on the right things. These are both management problems, neither of which is the fault of the employees.
Fixing these kinds of problems aren’t easy, but they are doable. I’ll see what I can write-up about this in a later memo. But for now, remember that if you hear people grumbling about other people not working, it’s probably a much more serious problem. Of course, if you do have people on your team who aren’t working out you’ve got to let them go as soon as possible. But that’s a problem every manager learns the hard way very early on.
Jul
19
Memo #9 – Launch early and launch often
Filed Under Business, Startups | 2 Comments
Based on my own experiences, and what I see happening to some friends companies, I am now fully committed to the “launch early / launch often” strategy (at least w/ regards to Internet related ideas).
Here’s why:
- When your only feedback loop is your board of directors and your employees you will never develop a product that your customer wants. Nor will you ever feel ready to launch.
- If there is a market need for your product, but your product doesn’t quite meet the market’s needs when you launch, you will get their faster by quickly iterating over customer feedback.
- Related to #2, if you spend months or years developing a service, it’s easy to get lazy or burned out. When your customers are demanding a better product, it’s puts the fire under your belly. This may be one of the best reasons to launch early.
- At any given time, someone else is building a product that will be better than your current one. This is why you have to also launch often.
- Revenue. Regardless of how much money you have or how much you’ve raised, launching early gives you maximum run rate to start generating revenue. And often times, launching will start to bring about buzz and inquiries about partnerships which may be revenue-producing. You don’t know about those things until you launch.
Jul
16
I’ve been helping out a few friends work on growing their businesses recently and I’ve seen something that is worth a quick memo. In case it’s new to you, there are companies like CrazyEgg and Clickdensity that offer great (and inexpensive) tools to gain insight into what people are clicking when visiting your website.
The problem I’m seeing is that by and large people are misunderstanding the point of these heatmaps.
A heatmap tells you WHAT someone is doing but not WHY they are doing it. In one example, someone showed me a heatmap that indicated that almost all the people on the site clicked on the product tour button on the top right and nobody clicked on the pricing text link on the bottom left. The person showing me the heatmap concluded that people care more about seeing the product before they consider pricing. He may be right, but it’s also equally possible that people were simply missing the link to the pricing information.
I’ve got more to say on this subject, and the larger issue of people understanding why people do the things they do on a website, but that will be covered in future memos.
For now, I’ll leave you with this story: An enterprise software company with a product in the six-figure price range was having a hard time qualifying leads on their website. They did the typical marketing stuff like putting a “Tell us about you” form in front of their whitepapers. But of the 100s of downloads they had per week, there was no way to qualify the leads. They realized that if they tracked people who first went to the careers page on their Website and then later downloaded a whitepaper the person was probably more interested in a job with the company than buying the product. If the person checked out the customers and success stories section of the site before downloading the whitepaper, it was a probably red-hot lead.
This is the science and thinking that has to go into analytics, and it something a heatmap would never tell you.
We’re lucky this isn’t rocket science. Otherwise we would be screwed.
Online display advertising is equally as ghetto as it is in the real world (maybe more); you get CPM which means “you pay for every 1000 eyeballs.” Advertisers do not like this, and will pull back these dollars. It’s long overdue. This is not what the Internet is for. Punch someone else’s monkey please.
Text ads, on the other hand, are easily quantified. CPC means “you pay only when people click.” Advertisers like that. There is also CPA which mean “you pay only when the person buys your shit.” Advertisers love that. These are the things that make advertisers spend their dollars.
People will create new metrics for display advertising, like engagement or click-through and charge advertisers in a more transparent way. This is inevitable. The bullshit publishers and ad networks will disappear because not only will they be unable to convert, they can’t even define “conversion.” Advertisers will get fine-grained targeting (eg, “I want to target cute single girls who date fun geeky jewish guys.”)
The future will come. MySpace’s new advertising system is the closest thing yet. MySpace needs to blow it out to publishers across the Internet and not just use it on MySpace properties.
So let’s make it rain, bitches. And before we make it rain, let’s have a drought to kill off the weak.