Welcome to the home of Jesse Wilson. I'm a Master's candidate at USC, a Product & Marketing Specialist at Spark Networks, and a technology addict.
Today when I opened my favorite instant messaging client, Digsby greeted me with an announcement: “We’re excited to announce the launch of ChatVille, a brand new Facebook game we created for discovering cool new people! ChatVille let’s [sic] you video chat with random Facebook users in a safe environment while earning compliments, unlocking badges, and leveling up in a race to become ChatVille Champion! http://bit.ly/ChatVille_Release PS: First one to unlock the Digsby Badge gets a free iPad!”
Naturally I tried it and quickly discovered a lot of bugs. Most of the time I click Next I get an error message: “Everyone is engaged in conversation. Chat with one of your Facebook Friends or click Next to try again.” That’s not fun! The only 10 people I’ve been able to connect to so far were all men. That’s also no fun, but not unexpected. I couldn’t figure out exactly how to improve my score and couldn’t find a guide anywhere.
Soon Adobe Flash Player began to crash my web browsers. All 3 of them. This problem persisted after uninstalling and reinstalling Flash Player and rebooting my PC. Now I can’t play the game at all because Flash Player crashes the browser immediately when the game loads, while Chatroulette still works just fine.
If this game worked, it could be the solution to the booming industry’s pervert infestation. Inappropriate conduct can get Facebook users banned from ChatVille quickly and permanently. But could this be enough of a difference from Chatroulette to achieve a lower male-to-female ratio than CR’s 9-to-1?
Try it yourself: http://apps.facebook.com/chatville/
In What Would Google Do?, Jeff Jarvis conveys his lessons learned from the greatest technology success stories of the past decade. He draws on best practices from Etsy, Craigslist, Amazon, and of course Google. I took notes of interesting, new concepts as I read but sadly didn’t end up with much. It may be great for corporate old-schoolers, who Jarvis seems to be talking to, but if you’ve been following blogs and news in this space this book will feel a little slow and obvious.
I managed to solidify a few key points that I’ll take with me as I engender my next big tech company in the next year. First, the best position is to create a platform on which others can build. I can expect to earn little or no profit for a while under this model, but hooking developers on my platform is a very powerful strategy. I need to extract the minimum value from the network of developers and related web services to take the network to its maximum potential size and value. This enables my developers and partners to charge more, which increases their dependency on my platform or network. Another positive side-effect is that competitors don’t want to jump into a space where the efficient leader’s margins are low.
Today’s web 2.0 method for growth is to forgo paying for marketing and instead create something so great that users distribute it. Later revenue can be found and extracted, but we’ve seen the revenue-maximizing strategy fail on AOL and Yahoo while Google stole their users to frame the world’s most powerful advertising machine.
These are the most powerful pieces of advice I discovered in WWGD:
How can you act as a platform?
What can others build on top of it?
How can you add value?
How little value can you extract?
How big can the network atop your platform grow?
How can the platform get better learning from users?
How can you create open standards so even competitors will use and contribute to the network, and you get a share of the value?
I’ll certainly be applying some of these principals to my next ambitious venture. As far as the rest of the book, I recommend reading a summary instead, unless you’re brand new to the Web 2.0 business world.
In my time studying Business Management Economics at UC Santa Cruz, I came to appreciate Economics as the underlying force driving many other Social Sciences, including Politics, Sociology, Community Studies, Anthropology, and History. In Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, authors Steven D. Levitt and Stephen J. Dubner assume this same premise to explore the hidden economic forces that connect seemingly unrelated phenomena in American society and history.
They do not argue that economics causes societal issues; rather they use economic models and experiments to explore complex issues, including racism, crime trends, abortion effects, medical malpractice, student and teacher cheating, and effects of parenting. They explore correlation and causality between distant patterns in society to convey an underlying human nature at work. In doing so they manage to prove that conventional wisdom is often wrong.
To me, the most interesting section of the book is what a bagel salesman’s data reveals about employee honesty in varying-sized companies and at different position ranks. Its findings “lie at the intersection of morality and economics,” and demonstrate consistent trends in theft, allowing the interpreter to actually predict theft within a company, given a few basic descriptions.
A bagel man named Feldman leaves bagels and cream cheese in office lounges and kitchens along with a wooden box and a sign requesting $1 per bagel on the honor system. By keeping perfect records (he’s formerly a financial analyst), he inadvertently invents a system to monitor rates of white collar crime.
At his own estranged office he receives a 95% payment rate because his colleagues knew him. But eventually he built his clientele up to 140 companies consuming 8400 bagels a week and the payment rate varied with distinct patters.
With enough data he learned to consider an “honest company” one that paid for 90% or more of its bagels consumed. 80-90% payment rate is annoying but tolerable, and if paid less than 80% Feldman posted a hectoring note. Even though as many as 20% of his clients steal bagels from him, his money box only got stolen 1/7,000 times.
The interesting part of his data is learning the factors shaping trends in honesty. Smaller offices tend to be more honest; a 50-employee company pays 3-5% more than a company with more than 300 employees, which can also be described as a reduction in theft as high as 60%. Unseasonably good weather reduces theft while cold weather has the opposite effect. The bad holidays include Christmas, Thanksgiving, Valentines Day and tax week, which each invoke up to a 15% increase in theft. Holidays that reduce the theft rate include Independence Day, Columbus Day and Labor Day.
Other interesting trends include the positive correlation between honesty and employees who like their boss and work. I was surprised to find an increase in theft as you move up the corporate ladder. Feldman speculates that executives cheated because of a sense of entitlement, or that perhaps cheating is what earned their place as an exec in the first place.
The conclusion of this excerpt, however, is quite positive and inspirational: The vast majority of Feldman’s customers do not steal even though no one is watching.
Freakonomics was a very fun and easy read, and not just because of my background in Econ. It’s entertaining all the way through and there are some very interesting insights into history and the nature of certain professions that you’d never know other than by reading this book. I recommend it.
I recently gave my blog’s social interaction mechanisms a complete overhaul – again. I watched Facebook’s F8 conference live on Facebook and was immediately inspired to add the new Like Button on my blog. See Zuckerburg’s presentation if you missed it.
First I deactivated the outdated plugins, Facebook Connect, I Like This, and Sociable. I tried a number of new comment systems and plugins using Facebook’s new Open Graph Protocol, which intertwines Facebook connections with almost any content on the web and easily enables sharing the content with your friends through Facebook’s news feed. This doesn’t displace the need for Facebook Connect, but Connect didn’t improve my comment system’s interface like I hoped. There’s more interesting info about the Open Graph concept at opengraphprotocol.org.
I was surprised by how difficult it was to find blogs referring me to the best Open Graph plugins, so I had to experiment on my own. My first attempt was Sprout Venture’s Facebook Social Widgets. I installed and activated the plugins, moved the modules into my sidebar and nothing displayed so I scrapped it for Facebook Social Plugins. This plugin works like a charm. It is missing one feature that I haven’t found a replacement for yet: the ability to like my blog itself. But without any post-install work, the Like button appears below all content on my blog and shows you which of your Facebook friends liked the content. It works perfectly and I recommend it to anyone with a WordPress blog.
Next I experimented with a couple of new comment systems before deciding on Disqus. It was surprisingly easy to install and customize: Register an account at Disqus, use WordPress’s dashboard’s plugin search to find “Disqus Comment System,” install and link it with your Disqus account in its settings page. On second thought, that may not be very easy for beginners, but it provides a much better result for a lot less technical knowledge than the alternatives. I’ve set up Discuss to enable my visitors to comment using their Facebook or Twitter credentials and quickly share on the mother sites. In addition to taking out the Facebook Connect and @Anywhere integration, Disqus replaced WordPress’s ugly comment system with a much more attractive one. Hey, if my favorite blog Mashable really likes it and uses it, it’s good enough for me!
Today we met one of my favorite speakers to date, William Quigley, Managing Partner of Clearstone Venture Partners. Quigley concentrates on its Internet and communications related investments, and gave our class a priceless education about how VC’s work, the stages involved in building a startup, how to select an industry to invest in, and how to pitch our companies to a VC.
Clearstone borrows ¾ of a billion dollars from large corporate investors to invest, and Clearstone gets to keep 25% of the profits. Quigley’s investment strategy is to invest in cold sectors because even if you have a great company, competition is what erodes profit margins; you want to be in the hot space two years before it’s hot.
He recommends using a VC because it’s really hard to go public or get acquired if there was no VC on board throughout a company’s growth to clean it up. The companies Clearstone incubates have always done much better than the people who just ask for money. A startup should always think about who would be a natural acquirer of this business; and think of others besides the usual suspects, Google, Microsoft and Yahoo. Companies tend to get acquired if they specialize greatly in one thing, especially if the firm does a lot of R&D, which big firms buy from startups with increasing frequency. Play in large markets because they’re very forgiving, and don’t depend on advertising revenue.
There is no shortage of money for good ideas, and you’ll need $10-100 million to build a successful company. No idea is too big to fun. For example, a WiMax business plan earned an entrepreneur $900 million of VC funding before a company was even formed! The downside to taking money from a VC is that they take control of your company. That’s not the end of the world though because the founder retains 50% ownership, no matter how much the VC puts in. That means an entrepreneur should shoot for as big an investment as possible. The pace at which you can raise capital will decide whether you’re the best in the biz or a lagger because there are always 10 other people right by you with the same idea.
The most valuable knowledge imparted on us is what a VC is looking for in a proposal, something all entrepreneurs want to know. First get their attention with a teaser PowerPoint presentation, and it’s a bonus if you already have a product or some customers. If you’re seeking less than a million dollars, go to an Angel instead of a VC. Guess market sizes and predictions when you have to because it’s a great problem when there’s no info about a market because no one’s capturing its future value yet. The CEO likes taking a modest salary so he can lead the team and say everyone’s bootstrapping together. Raise a lot of money but spend it as if you’ll never see another dime. Project revenues of years 1, 2 and 3. It takes about a month for the VC money to come through, but that’s a lot better than Angel investment time frames, where you’ll have to badger the investor for the check constantly. If one VC doesn’t like the idea, try pitching it to others. One of Quigley’s companies recently went public after getting rejected by 140 VC’s early on.
Quigley wants to believe in an entrepreneur’s vision about how the market will look in 3 years. I was surprised to hear that 75% of presenting to a VC is its entertainment value. My classmate Blake and I joked later that we ought to take up some acting classes before we approach a VC, but we will probably actually do it. The futurist must use 2-3 interesting trends or ideas about market evolution, convince the VC in his ability to recruit great talent, be informed and excited, be a great spokesman for the business, be capable of dealing with setback, and be willing to fight above his weight class. When you advertise yourself as a deep thinking in the space it becomes a self-fulfilling prophecy. Disciplined hard work will get you there: Spend months thinking about an idea, and package it in a way that’s easy to understand; have a really novel take on a new business model; capture the economics of your business in a chart or two. VC’s only want to play with ideas in which the visionary is right and everyone else is wrong.
The most startling fact of the day is that only 1 out of 1,000 pitches actually get funding, but there are many sources of money out there and if you have a great vision, stick it out and make it happen.
Hi, I’m Jesse Wilson, a master’s candidate at USC studying online communities and entrepreneurship. I’m fascinated by technology, social media, and internet products. In this blog I discuss books, classes, websites and companies that I find interesting. I welcome you to contact me or comment on any of my posts. Thanks for your visit!
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