The importance of listening to your customers

I think this blog post says it all. Google, we're more interested in quality than your time to market.

Listen to your customers. They'll tell you what they want. You don't need to guess.

Is the online market getting overserved?

I've been getting a number of requests to "trust someone on Spock." What is Spock? After going to their site, I don't have much of a clue. At best I can figure out, it looks to be an aggregator of one's online information and content.

While I do agree that the social networking space could use an aggregator, it also occurs to me that the social networking solution I've built up over time (blogs, email, RSS reader, LinkedIn) work good enough for my needs. As such, sites like Facebook, MySpace, and now Spock overserve my needs.

And I think that's where a lot of the older crowd gets their "I don't get Facebook" attitude - it doesn't improve on the needs relative to what people have put in place to date.

Where do I think the online market is underserved?

Personalization: with all the investment into social networking I am very surprised very little, if anything, is being done in the personalization space. Why doesn't Google do a better job knowing whether I am trying to buy something or whether I am researching a topic? Why am I not made aware of products relevant to me that are being promoted?

I have left a long trail on the Internet over the last 20 years. Why isn't that being used today?

I know I will get the "well it is being used." To which I respond "Bull." It's being used in a superficial fashion. I want deeper personalization. Sites that know my interests, my values, my history,

JetBlue gets it

A while back I shook my head at Boeing's failed Connexion initiative.

I think companies that are thifty by nature (or even by design) understand cheap ways to test product ideas. JetBlue is taking a much smarter approach to putting Wifi in its planes: it's starting with one plane and providing a stripped down service.

The idea here is not to give users the best experience. The idea is to see how valuable the idea is. They can track how many people try to access the service and how often they do it. Given that current user's alternative is zero access to the Internet, I imagine anyone interested will be happy with a "better-than-nothing" offering.

And, if the idea doesn't have any wings (no pun intended), then JetBlue gets off cheap. And that's the point.

Good for you, JetBlue.

Facebook CEO issues apology

Since I've blogged about this recently, including this apology from Mark Zuckerberg about their approach to Beacon.

PayPal's new Storefront Widget

I am going to try and sell my Baby Einstein videos through PayPal's new Storefront Widget. Was easy to set up, will see how it works in production.

Facebook's About-face

I would love to think that I had something to do with Facebook reversing course on its opt-out Beacon program. Apparently Facebook will require opt-in on every event it tries to share with someone's network.

Good for Facebook, but did they *really* need to hear from the Internet community that this was a bad thing? Seems a little arrogant on their part.

And, oh the irony... apparently Facebook founder Mark Zuckerberg wants a little privacy of his own. Oops.

I don't get Facebook

I interview a lot of candidates for Product Management positions. One of the topics I touch on during interviews is branding - do prospective product managers understand the impact a brand can have on their product, their customers' perception of the product, and the value created from the product. I usually asked for examples of brands that create value and brands that destroy value.

Being a product manager of web-based, software-as-a-service products means I keep my eye on industry trends. And one trend I've watched with interest is Facebook. Facebook appeared on my radar in mid-2006 when an external partner talked about them being a competitor to LinkedIn. At the time you could only sign up if you had an email address from a college or university. They've since grown and have been reported on every hour by every media entity ten times over. They are the biggest thing since The Beatles. Or so I read.

Putting aside the quality of their product offering, I believe they have made a big mistake with Beacon. Beacon is their offering which allows third-parties to publish messages to a user's Facebook profile, providing the user the ability to opt-out of the notification. That's right. Let me say that again. Users have to opt-out from telling their entire network what action they just performed on a third-party website.

The Internet community "revolted" when businesses automatically signed up users to their marketing email lists, claiming "well they can opt-out.". It didn't take long for businesses to realize the PR damage they were causing themselves and reverse course, now having users opt-in in a non-intrusive manner.

When I buy something online, I really don't want to take an additional step to opt-out of telling my entire Facebook network what I just did. If I want to tell them, I can tell them (I can do that today). I understand the benefit third-party websites believe they will get... but are they willing to create friction and privacy concerns for a marketing play? Didn't that fail already with email?

As for Social Ads, I just don't buy that Facebook users are using Facebook as a medium for commerce or commerce research. Until they have the ability to send someone a real drink through the Internet, that is.

And why the hype on Facebook when they have yet to turn a profit, yet to acquire half the accounts of MySpace, and still not even close to Yahoo on total page views. Haven't I seen this episode before? Bubble 2.0 anyone?

And finally, I just don't get Facebook as a product. Tried it for a couple of months. Zero value to me. I get much more value from email, RSS readers, blogs, others' photo sites, etc than I did from Facebook. I suppose Facebook is interesting to those that are new to the Internet and unfamiliar with existing tools that do a better job (which is what I believe propelled the growth of MySpace), and certainly there is a market for that. But not at the level it is getting press.

Oh yeah... I just disabled my Facebook account.

I think Red Octane is missing the boat

Guitar Hero III is a big hit. The wireless controller is great. Co-op gameplay is way cool. Another great set of songs.

Yet they really seem to miss out on monetizing this platform. Why not have additional albums as a download for an extra fee? Or record a video (using XBox camera) and have them sell you a version where they provide a background? Or create a marketplace where the community can create their own songs/scores and let others try/buy (try for free, want to play again? pay a fee). And so on. Now that they have created a great core, expand it.

This seems so untapped. The potential is there. Innovate and monetize.

Reagan's Rules of Product Management #8: Leadership

Want to be a better product manager? Hone your leadership skills.

As much as I think of leadership, I generally don't equate it to what I do as a Product Manager. I think of my role as a leader to motivate people to do the right things (which sometimes is counter to my product, which is ok), to motivate others to think about their careers in different (better) ways, and to provide leadership on customer-focused products and how customers think. Funny that I usually don't consciously think about how leadership affects my outcomes as a Product Manager. I say usually because it does occur to me from time to time.

One benefit of being a strong leader as a Product Manager is the increase in productivity you can accomplish with your product. While product managers are generally skilled enough to cover all aspects of their product - marketing, business development, support, product development, design, etc - where's the productivity in that? No, better to have others pulling for you and stepping up to deliver functionality... hence making your product better without having to lengthen the calendar time to achieve such functionality.

I am releasing a product this month, and I am amazed at members on my team are saying to me "don't do that... I'll do it." Designers. QA Managers. Tech writers. Software Developers. Program Managers. Business Development Managers. They are all pushing the product forward, without me even asking them to. Wow. More than making me feel great, it is all about delivering more to your customers... and that's what it's all about, isn't it?

My five second rule for product management

Last month I talked about my five second rule for prospecting. It is a synopsis based on my years of experience selling consulting services to corporate clients.

Well, guess what - the same human factors that expose the five second rule for prospecting apply to product design and management. That is: you've got five seconds to give a prospective customer or product user a reason to keep learning about your product. Or five seconds to figure out how to use a particular aspect of your product. And with products, the reality is that you have less than five seconds.

Why are point-and-click cameras so popular? Why is Google home page so productive? Why are home shopping channels so popular and profitable? They make things easy for the customer. Not necessarily efficient, not necessarily high performance, not necessarily powerful, but easy.

I am going to pick on my favorite travel site, Expedia. Go to their "get help" page, and you are treated with a plethora of options. I don't have time or bandwidth to sort through their site. Instead, why not ask why I am here? Present five options, I click one, I move on. Now present me with five me options. I click one, I move on. Oops, wrong move, I back up. Better slim down my choices than abandon before I can figure out my next move.

On a related note, to the extent possible, don't make the customer think. Information should be where customers expect it. Product behavior should be what they expect. Why when I use my oven when the timer is running I can't turn it off? Invariable I end up turning off the oven, then restarting. Why are they making me think and fumble through this? Your customers don't have time for unnecessary conveniences.

Just like my five second rule for prospecting, this is not rocket science. Retail stores organize themselves for this reason. Apple simplified MP3 players for this reason, and integrated the ability to download music to an MP3 player for this reason.

Get back to designing your products. You have five seconds to capture your customer.

What happened to eBay?

As I write this eBay's stock still remains at 2/3 its 2004 price, and eBay is still trying to figure out how to get back to the growth numbers it enjoyed in the late 90s and early 00s. I wrote about eBay's strategy on cleaning up its marketplace a year ago, but I didn't delve into eBay from a product management perspective.

Making the assumption that eBay is struggling, what do they need to do to right the ship? I really don't think this is that hard. First off, eBay has some strong assets:

1. They have a large base of buyers and sellers


2. They have the ability to scale their search, display, and transaction processing

And, since eBay's business model is predicated on a) listing fees and b) selling fees, if eBay has an issue, it's probably on the buyer experience side. If you have a happy buyer community, the listing fees and selling fees will follow.

I don't claim to have all the answers, but I know where eBay should start. It's Reagan's First Rule of Product Management: define their target customer! As a longtime customer of eBay, it is apparent that eBay is all over the map chasing new customer opportunities. They started off in collectibles, added cars, solicited commodity items and new products, etc. In doing so, they've lost their niche - their one area they can claim for their own.

eBay can certainly stretch their brand beyond their core (which I assume is the collectible and used item market); however, they can't do it at the expense of their core. eBay can certainly revisit the question of who their target customer segment is, and they may determine it is different than when they started. But they simply can't be all things to all people. Ask Sears. GM. Dell.

And, once you've defined that segment, no future product decisions should interfere with that segment!

As I've talked about in the past, I don't buy or sell on eBay much anymore. What used to be several transactions a month has become a transaction or two a year for the past three years. And gee that's the same time period that eBay has struggled with its stock.

Define your target market, eBay. You have the assets to win that space.

My five second rule for prospecting

A LinkedIn Question got me thinking about this, so decided to blog about it. It's about my "secret" to successful sales when I was doing consulting.

In a previous life I did my own independent consulting, doing software, architecture, and strategy for my clients. I sold my own services - no third-parties, no brokers. So I had to be good at creating my own prospect pipeline.

I learned cold-calling, prospecting, and pipeline management while on the job (I did consulting for about eight years before I went to work directly for one of my clients - Whirlpool). It was quickly apparent that the difference between an engaging conversation on a phone call, or a return email/phone call was my ability to communicate to the other person "what's in it for me?" as quickly as possible. If I got the right message across, I was granted more time to give the other party a reason to keep listening. Repeat.

I dubbed this "the 5-second model"... basically you have five seconds to give the other party you are trying to convince a reason to give you five more seconds...until the other party is asking engaging questions. At which point you will have an engaged prospect and you can throw the 5-second rule away and enjoy a normal conversation.

To be clear, the "5-second" internal is a metaphor for being concise and to the point. Your timing will vary.

Your 5-second windows should revolve around the following, and in the following order:

• What is the prospect's problem that you are trying to solve?


• (optional) How are you aware of said problem?


• What can you do to solve it?


• Why are you credible in solving it?

While this sounds obvious, I see this rule broken all the time, including when people call me. You can't break it, and persistence is not a substitute for the 5-second rule.

So, why does this rule work?

• People are busy. Duh, right? Unfortunately, a lot of people don't respect the time constraints of others. The 5-second rule respects those constraints.


• People's cognitive thinking follow the 5-second rule. When confronted with a cold call, people generally ask "what does this person want?", "how did they find me?", "can this benefit me?", "can I trust this person?", "how can I learn more?". The structure above addresses those questions.
  

What's does this rule mean from a practical standpoint?

• Research will yield a better result. While you could call lots of people as, say, a divorce attorney hoping to get lucky and stumble upon someone in marital dire straits, you can be more effective if you knew your audience ahead of time. In my case as a software consultant I researched the projects my prospect was working on, the technologies they used, and their current staffing levels and gaps.


• No chit chat. Not in the first 30 seconds, anyway. Don't ask about their day. Tell them who you are only in the context of it being relevant to their problem. Get to the point!


• Focus on the prospect's problem, not your solution. It may not be immediately apparent how your solution solves their problem. You can use one of the 5-second slots you've earned to talk about the solution and the fit to the problem.


• It works regardless of delivery mechanism. Email, phone, brochure, you name it.

Try it. I was successful targeting VPs, GMs, SVPs, and even CXOs using this approach over eight years.

Understanding where battles are won

With online content and information services, I tend to stay fairly loyal to one particular service, occasionally heading to their competitors to give their service a try. Things like search, maps, travel, news, and financial content (as opposed to financial services like my bank or brokerage) fall into this category.

I continue to find that Microsoft and Yahoo just don't get where I believe the battle for customer loyalty is won in this space - the input. Assuming each is "pretty good" at returning content from search, the differentiator comes down to who understands what I am asking?

I just tried to find directions on Live Maps (or whatever it is called) and a) I couldn't figure out even how to get to that functionality and b) Live Local Beta (which is where maps.live.com redirects) couldn't understand my input!

Likewise with Yahoo - every time I try their SMS search, it hiccups and gives me a laundry lists of formats to follow. Contrast that to Google. I type in "weather 98065" and guess what I get? The weather for zip code 98065. I could also type in "98065 weather", "weather for 98065", etc.

Google does the same with Calendar. I was at my son's first soccer practice, I got the soccer schedule, and I opened up my Windows Mobile device (a T-Mobile Wing for anyone who cares), navigated to Google Calendar, and just started typing in games as single-line text entries - "home soccer game 6pm sep 14". And it worked. I didn't need to ask for format, and I didn't have to go through the frustration of retyping on an unfriendly input device like a mobile phone.

What service am I likely to use? One that has rigid entry constraints? One that requires a user manual to use? Not hardly.

I don't know if Google's SMS search results are better than Yahoo's. I never get that far on Yahoo!

What absolutely shocks me is the number of sites that still think in terms of form fields instead of open text. Or the number of sites that can't recognize a phone number in the format "xxx.xxx.xxxx". Wow, 10 years after Google showed us a better way of text input, we are still thinking in Cobol.

I am convinced this is where the battle line for customers is won. And I believe it is the reason for Google's success in the search space. Would love to see the data, though :)

It's the people, stupid

Jason Kilar was the first SVP I presented in front of when I joined Amazon back in 2005. I worked with him on Webstore by Amazon's 2006 operating plan, and I loved the perspective he had on the business I owned. I learned to not just gather, analyze, and present data; I learned to ask myself am I doing the right thing, the right way, and follow that immediately up with how are we going to win? That was very refreshing for him to step away from the raw numbers and ensure I understood the big picture and the strategy behind Webstore. My personal and professional growth is a function of a number of experiences in my career, and my interactions with Jason definitely shaped who I am today.

People are the difference in whether innovative concepts succeed or fail. YouTube wasn't the first online video service (Google beat them to it by a long shot), but YouTube had great people - people that founded PayPal and turned it into a success. That was the difference. You might argue that YouTube had a better user experience than anyone else out there, and I would agree. And I think that better experience was a function of the people at YouTube who "got it."

Jason moved on from Amazon, and he now heads up Hulu, which looks to be a promising video content site and I would expect to do very well with Jason running the show. I've signed up for the beta, will see if I am invited.

Oh yeah... good luck Jason! I'm rooting for you.

We "deserve" free Wifi?

I really think it's cool that Google is funding free Wifi access in the Bay area. I assume there's a business value behind it - the more people are spending time on the web, the more hits Google's Search Engine and AdSense products get. A nice, innovative approach to driving business. Kudos to Google.

I enjoyed the quick read on their blog this morning until I got to this line:

we continue to hope that EarthLink and The City will find a way to enable all San Franciscans to enjoy the free WiFi network they deserve

Maybe I'm being petty, but I really hate the entitlement mentality for luxury items (after all you need a device capable of Wifi before using it). Wifi is not an entitlement, although I would suggest there are legititate reasons municipalites would provide such a service to their communities for free.

When I ran my consulting businses out of Michigan City, Indiana, I was part of the Michigan City Technology Task Force that decided that free wifi in Michigan City made sense. But that wasn't out of entitlement for the residents, it was purely a community economic development decision - the benefits for the community outweighed the costs of providing the service. And my friends in the Seattle area would be shocked to learn that we proposed such a solution without proposing to raise taxes!

Google's innovative approach to driving web traffic is good. Let's not oversell what it is, though. You can, and will, damage a brand that way.

Why I love Dinner Impossible

This is one of my favorite TV shows to come along in a long time. At first I didn't really understand why I enjoyed it so much, then it hit me. It matches my personality. I love the idea that Robert Irvine will accept a tremendous challenge without knowing all the details. That's the point - set a deadline, set some success criteria, then figure out what it takes to meet the challenge. I love it. He has no idea who is helping him, what tools he has available, what space he has available, etc. He accepts the challenge, then assesses what he has, adapts, and ultimately wins.

Again, I love it!. The business world needs more Robert Irvines.

Some will argue this is a fault, some a strength. I think it's a strength. One of the biggest blockers of execution is people who need every t crossed and i dotted before making a decision or moving forward. Very few people can start with a deadline and a goal and work their way backwards into a solution to meet the challenge. This is arguably the difference between entrepreneurs and corporate mentality (if you can't tell, the lack of entrepreneurship in corporations, well, gets to me).

Change happens. Expect it. Adapt to it. Do whatever it takes. To expect the obvious is to set yourself up for failure.

I remember running my own consulting firm, and having a lot of people ask "how do you know where your next client will come from?" I always answered the same: I don't. And that's the point. Not knowing had zero to do with the success of my business. Maintaining a prospect pipeline, executing relationships and negotiations, and delivering value was what made my business successful. Yes, clients backed out of deals. Yes there were times I was unbillable. But more often than that I was turning down clients, turning down work from existing clients, etc.

Make it happen. The decision comes before the data.

Amen.

Solve mobile banking in a different way

I'm seeing a lot of investigation into mobile banking. That's interesting - using a ubiquitous technology to attempt to solve problems to an ancient institution. Sounds like a natural evolution of banking. But if you think about this, I'm not convinced mobile banking solves problems. What would be the use cases where I need to bank by phone? Do I really need to check a balance or transfer money instantaneously? Seems like in all use cases I can wait until I am in front of a computer, ATM, or teller and conduct my business in a less rushed manner. Not to mention I really don't want another reason for Seattle drivers to be on their phones while on I-90.

I'm also convinced its time for an innovative bank to step up and change the banking game. Why do we have separate checking and savings accounts? Why is online banking still so primitive? Why isn't Quicken better integrated with online banking solutions? Why is ING Direct able to give me terrific rates and Washington Mutual can't compete? Why in late 2007 we still don't have online bill presentment integrated with banking while leaving control to the consumer (credit card companies are the only ones that have mastered this).

There is so much inefficiency in banking (and payments while I am at it, since I think of the two as two sides of the same coin).

A note to the banking industry: don't chase technology. Build better products.

Podcast with Robby Walker and Wayne Crosby of Zenter and Google

Not my podcast :) but here's the link,

Best states for doing business

I found this to be an interesting read. Not surprising Washington is in the top five, and not surprising to see so many midwest states at the bottom.

"Quality of life" is a hard metric to rank, and while I understand how they did it, I don't put a lot of stock in any ranking system that ranks Indiana 12 spots ahead of Washington relative to quality of life!

Apple's new disruptive innovation - the iPhone

The iPhone will change the mobile phone industry, but probably not in ways most people are thinking. I love the idea of the new interaction interface, and I love the idea of getting the entire internet on my phone. However, the genius behind the iPhone, in my opinion, is the ability to activate the phone and service from iTunes. That's huge. This convenience factor will drive a new consumer behavior, and consumers will expect phone activation to be this easy for all phones (or any device for that matter... have you seen how terrible the Harmony Remote Control configuration is? Argh.) That will put Apple in the driver's seat, and phone carriers and manufacturers will be paying Apple to offer activation via iTunes. Mark my word.

Amazon takes top spot in BusinessWeek IT 100

Ok, not sure how authoritative a source BusinessWeek is on IT or tech companies, but they put Amazon on top of the tech heap. Nice to see Amazon recognized as a technology company and not just a retailer.

Google acquires Zenter

I innoviewed Wayne Crosby from Zenter a couple months back, and Zenter has been acquired by Google. Congrats to Wayne! And enjoy the Mountain View area.

eBay vs. Google

I know this is old news, but eBay took the kid gloves off last week by pulling their SEM dollars from their Google channel. Timing was such that it coincided with eBay Live, and Google's attempt to hold a "freedom of choice" party to encourage the eBay community to push eBay to support Google Checkout.

Now, I don't disagree that the timing had to do with Google's antics; however, companies as big as eBay don't just pull their SEM spend without having some good data to suggest that you aren't going to lose out on the deal. Something tells me that eBay is questioning their strategy on keyword bidding (and I've been right about eBay before :) ). This is something I haven't seen talked about in the blogosphere. Google is an impressive company with an impressive track record. But just like IBM, Microsoft, HP, Dell, and a plethora of other companies, they are assailable. Everyone is (Steve Jobs, are you listening?). However, the real insight here is: is SEM spend on Google really worth it? eBay is challenging that notion. What if they are right? SEM spend won't go away, but it will mean that SEM customers will spend less and less for keywords (I've learned firsthand that many small businesses find keyword bidding too expense and generate a negative ROI) in the e-commerce space.

I am looking forward to the next year in this space. I predict this is the first chip in Google's armor, and they will need to figure out a way to address (Google Analytics is a good way to counter... show customers their ROI in a measurable way) if they want their stock to keep climbing.

Our team is growing

We here in Amazon Web Services are creating new products... and we need help! I don't have a LinkedIn posting yet, but we are hiring UI designers (AJAX/Web2.0 design a huge bonus), software testers/QA, and program managers. Interested in hearing more? Email me at amazon.com prefixed with reagan at.

My Innoview with Wayne Crosby

Yes, I'm coining a new term - "innoview." Don't know what it means, I'll let the audience decide.

Wayne Crosby (wcrosby at gmail.com for those that want to reach him) and I launched a complete rewrite of Webstore by Amazon last year, bringing a large dose of creativity, innovation, and bar-raising customer experiences to the market. I truly enjoyed working with Wayne and he was arguably the largest reason for the success of the product and its launch. Wayne is now off to bigger and better things, namely launching a new company after incubating it via Y Combinator.

JR: Tell us a little about what you are doing now.

WC: In January, Robby Walker and I founded Zenter, Inc. with the goal of building the next version of presentation software - not just PowerPoint online. For the first 10 weeks of 2007 we did nothing but design, code, sleep, and leave our apartment once day for a little tennis. All of the hard work seems to have paid off. We have written 40k lines of code, filed 2 provisional patents, created several million dollars worth of value, and have already talked to acquirers in this short time. It's been the most exciting and rejuvenating 3 months of my life.

JR: Congrats on your rapid success! What gave you the inspiration to try Y Combinator as an avenue to launch a new company?

WC: In early 2006 Robby and I started talking about doing a startup. Y Combinator had completed 3 sessions at that point, so we contacted several of the teams and most seemed to be doing well and had nothing but good things to say about it. Y Combinator was founded by Paul Graham and the team that built and sold Via Web to Yahoo! The product was re-branded as Yahoo! Stores and became the #1 ecommerce application. With my background in ecommerce (Go Daddy's Quick Shopping Cart & Amazon's WebStore) I felt like Y Combinator was a natural fit for us. We spent about 2 weeks brainstorming about a product that we felt would benefit from a program like Y Combinator. We settled on Presentation Software and haven't looked back since.

JR: How has your concept been received by the community?

WC: We have received almost the same reaction from everyone (technical, business, angel investors, and VC). At first people don't understand why we would want to do PowerPoint online. However, once they see a demo and understand that we are not PowerPoint, but the next generation of Presentation Software, they get really excited about it. At first I was hesitant to the idea as well. I thought "Presentation Software isn't sexy - I want to do something that is going to be innovative and revolutionary." But I realized with that thought there was something there. Presentation Software is a proven multi-billion dollar industry that has not had a significant feature upgrade in 15 years. I then asked myself, "What would make it sexy, innovative, and revolutionary? If PowerPoint were built today without the desktop limitations of yester-year what would it look like?" Low and behold we have been able to get a lot of people excited about Zenter. We are still in private beta, but have given several demos and have been picked up on quite a few high profile blogs including:
business 2.0,
TechCrunch,
webware,
several investors,
and of course this one.


JR: Was Y Combinator what you expected?

WC: It is the truth when I say the 3 months at Y Combinator were THE BEST experience of my career thus far. Robby and I laugh about what it would be like to do this without Y Combinator. The instant credibility and connections you get by just being part of Y Combinator are amazing and really give you the greatest chance for success. Y Combinator does not give very much money to their startups, and they ask for about 5% of the company. Many people on the blogs feel this is too little money for so much equity. As someone who has been through it, it was a bargain and I would do it again in a heartbeat. It comes down to the famous watermelon vs. grape analogy. Would you rather have 95% of a watermelon or 100% of a grape?

JR: Mmmmm.... grapes. What was a typical day or week like at YC?

We basically lived by the following schedule 7 days a week for 3 months.
10am - Noon: roll out of bed and stumble into the living room to sit at the computer, check email, blogs, news for the day and start coding
Noon - 12:30: eat our $2 Lean Cuisine lunch - My personal favorite is Swedish Meatballs
12:30 - 7pm: Heads down coding, music played all day long and we alternated days to pick the play list which worked well
7 - 8: Kick Robby's ass at Tennis on the apartment courts. I think I may have won 3 sets over the entire 3 months. But they were always like 6-4 and it got us out for some exercise.
8 - 9: Make and eat gourmet dinner - mostly tombstone pizza, but occasionally Red Baron when they were on sale. Care packages from family were also extremely helpful to make sure we didn't eat too poorly.
9pm - 4am: Code like the wind - maybe do a design session or two if we are trying work through something particularly hard.
4am - 10am: sleep

Tuesdays were a special day. Every Tuesday night Paul Graham makes dinner for all of the Y Combinator companies (including several past session startups) and invites a special guest speaker to give advice. This year's lineup was very impressive and included:
Joe Kraus: Founder of Excite and JotSpot
Evan Williams: Founder of Blogger and Twitter
Greg McAdoo: Partner at Sequoia Capital
Mark Fletcher: Founder of OneList and Bloglines
Paul Buchheit: Creator of Gmail and Web 2.0
Ron Conway: World's largest Angel Investor
Sam Altman: Founder of Loopt - one of CNNs top 25 company to watch in 2007, and arguably Y Combinator's most successful company to date
Jame Hong: Founder of Hot or Not
Bradley Horowitz: Head of Yahoo! Small Business Mergers and Acquisitions

Over 60% of the speakers play or played an extremely important roll in our company. For example, we were struggling with a name for the product when Evan Williams came to speak. He owned Zenter.com and we ended up trading a little stock for the domain and to get him as an advisor. He now has an active interest helping Zenter succeed and even offered office space to us in San Francisco.

JR: So, with the sleep and eating schedule its basically like college? Watch what you eat or you'll end up with my physique. What was different at YC from what you expected?

WC: One of the hardest things about doing a startup is surrounding yourself with successful and supportive people. This was one of the main things that attracted us to Y Combinator. However, when we applied I was thinking these roles would be filled by Y Combinator founders and some of the speakers. I completely underestimated the value of fellow entrepreneurs who are going through it. Y Combinator companies have an incredible bond and help each other out more than I ever expected. There is an apartment building in San Francisco nicknamed the "Y-Scraper." The apartment has an unusually high percentage of Y Combinator startups in it. The eight there now are:

• Zenter
  
• Scribd
  
• justin.tv
  
• Weebly
  
• Reddit
  
• SnipShot
  
• Xobni
  

Every one of them is on the path to greatness and it creates an environment like none other in the world.

Also, Paul Graham is ALWAYS right. But at the same time, he lets each of the teams figure things out on their own without forcing his view. For example, Every week at the dinners he would say, "Just build something people want - don't worry about raising money now" and then would hear people say something like "Raising money takes a long time, plan on 6 to 8 months". This was petrifying to us. We were watching our small round of seed funding run out day by day and we were supposed to plan on 6-8 months after we started the fund raising process to see more. Shouldn't we start ASAP? I can only speak from my experience, but building something people want is the hard part - raising money was easier than I expected.

JR: What was the downside of your experience YC?

Y Combinator requires you to move to either Cambridge, MA (Summer session) or Mountain View, CA (Winter session). The night we submitted our application to Y Combinator, we found out my wife was pregnant with our first child. The hardest decision my wife and I made was me going off to do a startup while she remained in AZ. We bought video phones and used Skype video conferencing every night to stay in touch. The video phones helped a ton, especially since I only made 1 trip back home in the 3 months. Looking back it was absolutely the right decision for me, the family, and our future - but it sucked not being around her for 3 months.

JR: What advice would you give entrepreneurs now that you have been through this experience?

WC: I'm far from an expert on this one - but here is my advice for whatever it's worth:

1. Get something - anything - out to the world. Pick a product that matches the resources you have available to you. Last January I started 2 side projects as my first venture into entrepreneurialism. First was a real estate site that aimed to streamline the existing processes that exist today. The second was a sudoku website, www.counttonine.com. The real estate project ended up being too large of a project to get off the ground with 1 person working part time on it. However, the sudoku site has exploded since its launch. It currently has more than 10 million page views per month and continues to increase 10% or more each month. Count to Nine has supplied a nice supplemental income while we got Zenter off the ground. It was an easy side project and ended up being what enabled me to make the transition to focusing on a startup full time.
   
2. Surround yourself with other entrepreneurs. If you are not in a startup hotspot - you have one option. MOVE. I am a big believer in being immersed in a culture that supports entrepreneurs. I look at it like this - there are so many things that you cannot control that dictate if a startup succeeds or fails. The location of the startup is something you have complete control over. Why not maximize the chance of success by moving somewhere where you will be surrounded by people who understand what you trying to do? For example, when I returned to AZ and told people what we were doing I often got, "You aren't serious are you? YOU are going to directly competing with Microsoft?" Most people thought we were crazy. In Silicon Valley, people are excited about it and want to talk about how they can be involved.
   
3. Pick your co-founder(s) carefully. Get a co-founder you can spend every minute of every day with - pick someone you have worked with in the past that you have a good working relationship with. DO NOT attempt to do it alone. In my opinion the best products come from small teams of 2 to 4 people. No one person is good at everything, so pick someone that compliments your abilities.
   
4. Try and stay in the middle ground emotionally. Startups are a rollercoaster of emotions. Everyone will warn you of this, and it is next to impossible to avoid, so just know it is going to happen. One day you might think you are going to be a multibillion dollar company, the next you might think you are going fail miserably. The truth is probably somewhere in the middle - statistics say probably closer to the fail side. But don't let fears of failure stop you. I would challenge you to find an entrepreneur that has "failed", however you define it, and ask if they would have changed the experience for anything. I looked and never found one.
   
5. It's your company - you know best. Although this is a true statement, you should always listen to people. If people are telling you that something isn't right in the product - they are probably right. Use the opportunity to really understand why they are saying that and brainstorm and see if you can come up with a better solution. It's the cheapest and best usability testing you can get.
   
6. Keep your physical health in check. It's easy to not eat right and not exercise when doing a startup. Don't let it happen. The days that we ate poorly or didn't exercise were noticeably less productive than others. We quickly realized this and scheduled a daily tennis match to get us out of the apartment and moving around. Try and find a sport where you and your co-founder(s) are evenly matched. A little friendly competition is really healthy and it's a great way to settle decisions that don't really matter.
   
7. Build something people want. Paul Graham would be disappointed if I didn't include this one. This is the mantra of Y Combinator. It sounds obvious, but most startups don't do it. Spend time really thinking about of your product. Is it something you yourself would use? Is it so much better than existing solutions that you would make the change to use it? If it is, you're on the right path.
   
8. Think virally. Mark Fletcher had a great definition for this when he spoke at Y Combinator, "A viral product is one where users experience benefits created by others that use the product that would not otherwise exist." This is really powerful. When this works, your users become your marketing department. Think of your product in this way - do users have a reason to tell other users to try your product? If not, I'm not going to say your product is doomed, but it's an uphill battle.
   
9. Get a mentor. Find someone who recommends good books to read, someone who can give sound advice on product vision, someone who can help navigate raising money, someone who has done a startup in the past year or two, and someone who is working on a complementary product to yours. These roles don't need to be, and really shouldn't be, filled by one person. I have several mentors and all have been the difference between success and failure at different stages of my career.
   
10. Don't rely too heavily on existing libraries for your differentiators. This is always a delicate point with engineers. I'm not suggesting reinventing the wheel every time you start a new project. However, the features that are going to differentiate you, by definition, need to be yours alone. For example, Zenter relies heavily on JavaScript to provide a rich end user experience. We looked at several libraries (Dojo, jQuery, Prototype, etc.) and in the end developed a meta-language on top of JavaScript to meet our needs, using a tiny part of Prototype. That decision has enabled us to do things that would not have been possible if we just relied on existing libraries.
    
11. You don't have to start a startup to be a part of one. There are a lot of great startups out there that are looking for people with the entrepreneurial spirit. It's a great way to test the waters and see if it is for you. (Shameless plug: Zenter is hiring! If you have crazy JavaScript or Java skills we want you. Email us at "jobs at zenter.com").
    

JR: I'm Java 1.0 Sun Certified, can I apply? Seriously, can you talk about what's next in your future?

WC: In the short term, we are focused entirely on getting Zenter out of private beta. We have several media events that are scheduled for next month, so more heads down coding until then. After that, the focus is going to be on building Zenter into a $100m company with growth (piece of cake?). Also, my son is due on May 22, 2007, so it's a delicate balance between getting ready for the new Crosby and getting Zenter launched. It's a great problem to have.

Longer term, I feel I have found my calling as an entrepreneur. The startup environment is very addicting, and Zenter will not be my last. We have compiled a list with dozens of ideas just waiting for some spare cycles to get going. Hopefully they won't sit idle for too long.

JR: Congrats again on your upcoming child - all I can say is don't miss the birth or you'll be writing songs like Harry Chapin (as a father that song always brings tears to my eyes and definitely focuses me on the right things in life). As always, thank you Wayne for your time. Of course I wish you the best of luck in your future endeavors, more so if they involve me :)

UPDATE - Zenter bought by Google

How not to handle customers

This is amazing. Forget the anecdotes... how can you terminate a customer on a whim? And that's exactly what Comcast has done. Terminating customers who have not violated any terms and conditions agreement is paramount to a whim.

If Comcast had a problem, simply update the T&Cs, notify customers, and terminate those that violate. Pretty simple, eh?

Ideas versus Execution

I see a lot of people and companies focus on the idea phase of Innovation. "How do I get my ideas in front of the right people?", "Why aren't great ideas adopted in the marketplace?", "How can I get my company to get more innovative ideas?", "What techniques do you use for brainstorming and generating ideas?"

Sorry, those are the wrong questions (I feel like James Cromwell from I, Robot).

In my experience, ideas are a dime a dozen. It is rare to hear new to the world ideas, in any context.

Innovation, in my estimation, is a function of execution. The willingness of companies to try new things in the absense of data and the ability to execute superbly on those ideas. That's innovation.

I will say this about ideas: the best ideas are formulated by a wide variety of individuals and iterated over time. The Lone Innovator, as a percentage of overall ideas, is not the source of great ideas. Rather, ideas are refined over and over and over and over, across companies, across continents, across people. The best ideas are those that have been refined by a diverse set of people with a wide variety of perspectives.

The biggest blocker to innovation, in my estimation, is a company's willingness to try new things. Or, more accurately, they are waiting for data that doesn't exist (and won't exist until someone executes on said idea). Yes, I'm preaching from Innovator's Dilemma; nonetheless, seems like many people are not getting the message :)

4GL as Service

Microsoft has created the term "software-as-service," primarily to denote the difference between their traditional software business and the new wave of offering similar functionality either via a web browser or a remote server hosted in the Internet cloud. I recently took a look at Apex, the latest offering from SalesForce.com web services space, and couldn't help but notice the parallel between Apex and 4GLs of the early/mid 90s. Only this time, the 4GL is running in a remote, hosted environment, and not on a server the developer has to own. Way cool. Looking forward to giving Apex a try in the coming days/weeks and see how flexible and capable it is.

Scales of Google Influence

I'm a big fan of Google. As I've watched SEO turn into "optimize for Google" I've noted two key things:

1. Google forces sites to have better content. This makes the web better, Google benefits by organizing said improved content better. A net gain for Google.
   
2. Sites have figured out how to play the Google PageRank game, Google loses because its metric is tainted (a link is no longer an indicator of value). A net loss for Google.
   

In other words, there are two ecosystem forces at work here, one benefiting Google, one hurting it. Who will win???

SEO experts have gamed the Google PageRank system, to the extent there is a market for links on a web page. Once that happened, the backlink metric no longer became an indicator of content value. I submit Google has to figure out a new "GPR" algorithm. They need to innovate. What worked 10 years ago is no longer as effective as it once was. They risk being disrupted, just as they disrupted AltaVista, Excite, and Webcrawler (wow, how many readers have even heard of those search engines???).

Or, perhaps that is why they are expanding their product offerings? Are they trying to get in a different game? I like Google Apps. It shows Google is capable of productizing away from their core. The catch is - can they market and brand away from their core? They can with me :)

The Value of Product Management

As a product manager, I will be the first to admit that much of product management is rote, overrated, anyone-can-do-it, etc. The key word is "much." The perspective that I believe product managers bring to the table is that they understand how consumers think about products. Let me give an example...

I watch The Apprentice regularly, and I've found it to be an interesting measure for me to test my instincts. In the last show, the teams had to create a new dish for El Pollo Loco (fast food chain in southern California), and were measured on total sales. Based on the product alone, I predicted that the "Tortilla" team was going to beat the "Mango" team. Why? Very easy to see that the Tortilla product was not as big a stretch from El Pollo Loco's core offering; as such, it would be easier for customers to identify with and try. A fruit/chicken combo, while tasty, is just too far out there to generate significant sales. This obversation should not be a surprise, and most people understand this basic concept.

So, why wasn't this considered as part of product design? Why wasn't this part of the thought process? Instead, both teams jumped on the "sales and marketing" bandwagon, as if sales and marketing can account for all product ills.

This is the job of product managers: to understand the market, to understand consumers, and to design a product that meets the needs of the market and internal goals/strategies. Sales and marketing exists to communicate benefits of said product, not to cover up for deficiencies in the product or strategy gaps. For some reason, this basic concept, while usually briefly touched upon, is consistently overlooked on The Apprentice.

Ultimately, I am always surprised at what passes muster on Trump's show. Apparently bravado, energy, and communication skills weigh in higher than creativity, knowledge, insight, and accomplishment. A key miss on the show is the notion that the winning team "did it right" and the losing team "did it wrong." If only business were that black and white.

eBay's strategy panning out

Just like I predicted (ok, you will have to dig through the archive page to find my commentary on eBay's strategies to clean up its marketplace through higher seller fees). See this article in BusinessWeek. To whit...

Positive Pruning

Whitman attributed the solid quarter, in part, to more product listings turning into actual sales on eBay's site. The company's core auction business had suffered last year from sellers dumping slow-selling and patently unwanted merchandise in their eBay stores, as well as pricing some items too high for eBay's bargain-hunting audience. The result was a poorer experience for buyers and inventory that sat on the site far longer than desired, Whitman explained.

Last spring and summer, eBay raised fees by roughly 6% in order to encourage merchants to sell items people want and to price them to move (see BusinessWeek.com, 7/19/06, "Will eBay Fee Hikes Recharge Growth—or Drive Away More Merchants"). So far, the plan seems to be working. The site saw declines in the inventory that languished in eBay stores before selling or that didn't sell at all. "We are moving toward a better eBay marketplace," Whitman said during the call, cautioning that there was still work to do this year. Company CFO Bob Swan said that conversion rates have yet to reach their 2005 levels, but that they markedly improved since 2006.

Indeed, focus on the end customer is always a sound strategy. Despite the uproar from the eBay seller community, eBay did right for the customer, and are rewarded in the stock price. Quite a lesson for everyone in the e-commerce space.

I'm still hiring software developers!

By the way, I'm still looking for strong software developers for a new Amazon product we are going to launch this year in the Amazon Web Services organization. If you know Java, have some experience with e-commerce or payments processing, love technical challenges, like to innovate, and are interested in shaping the future of Amazon Web Services, please contact me at jvreagan at gmail dot com, or submit your resume directly here.

Real savings from Amazon S3

An interesting blog post from the SmugMug folks talking about real dollar savings from using Amazon S3.

Prioritize and focus, prioritize and focus

Let me say it again, prioritize and focus.

This is something I am addressing on my current product... making sure the team focuses on the core issues, the product basics, and getting those right before solving the 10% problems or the fringe problems.

This sounds so basic, but it is a consistent challenge that a leader faces: how do you keep your team focused on the high priorities and what's important, especially if those two are not sexy enough?

What I do is acknowledge that those other issues are important, and are relevant, they just do not rank in priority relative to other features. For example, Amazon.com is a great retail site with lots of features, but none of those features (product recommendations, shipment tracking, cancelling orders, gift options, wishlists) would be relevant without the basics: placing an order, processing payment, emailing confirmation to the customer. While that sounds obvious, and it is obvious, it is still true that many. Take a bunch of Amazon engineers, ask them to build an e-commerce site from scratch, and I guarantee the first questions and focus would be around shipping, promotions, recommendations, split orders, etc. The discussion would not start around the basics.

In addition to acknowledging those fringe features, I document them and put them on a priority board. Acknowledging the importance, and selling the idea that there are simply more important things to focus on, is an important step when these issues come up. In addition, it gives a great respite for engineers that need a break from the here and now and want to spend a short amount of time working on something new - there's a board already set up to pull those ideas from.

None of this is rocket science, none of this is new. That said, I do see teams managed that do not execute in this manner; they may have these tools, but they are not enforcing this as part of culture and execution. That's what needs to change. It will be your biggest challenge in product development.

Innovation is my inspiration...

... leadership is my aspiration

I stole that from an Amazon employee, but I LOVE it! Perfectly summarizes my drivers and goals.

This is too funny

How to deal with telemarketers

Now this I like

Well, kinda. Just stumbled across a new search engine that actually incorporates human screening of sites into its search results. Pretty interesting concept; I won't repeat it, you can read about it there.

I certainly don't think this is scaleable, nor do I think that I will get the best results just because a human has interjected. What I *do* like is that they've acknowledged the problem in the current search engine space - there is too much crap out there, and a search engine's job isn't about finding related content, it's about filtering out crap. Knowing the problem is half the battle.

Innovation in the kitchen

Very good move for Whirlpool, nice to see them try to take this concept to market. Wish I could say this was one of my ideas while I was at Whirlpool, but alas, this wasn't my baby(although I knew the guy that championed and sold this idea).

I like the name Centralpark as well - good brand name for this concept.

2008, eh? I won't be in the market for a new fridge then, sigh :(