Can the Bible teach us how to build great startup teams?

jesus-and-disciples
Standard

“Individuals don’t build great companies, teams do,” is a popular saying in the startup community, thanks to Mark Suster. Indeed, of all factors contributing to startup’s success: product/market fit, sufficient funding, competitive barriers, and so on – none are relevant without a good team in place.

But how do you know when you have a good team? The challenge with team building is that there are quantitative ways of assessing its health. You know when you need to raise money by looking at your balance sheet. You know that you’re on track for a product/market fit when customers start giving you money. But how do you know that your team has the right composition?

There’s a useful concept that comes from an unlikely source: the Christian church. I promise that this post won’t be about converting you to one religion or another, but keep an open mind. In his book, “Building a Discipling Culture“, author Mike Breen developed a concept called the Fivefold Ministries. The idea stems from the five core roles that are outlined Ephesians 4:11-16 – apostle, prophet, evangelist, pastor, and teacher:

11 Now these are the gifts Christ gave to the church: the apostles, the prophets, the evangelists, and the pastors and teachers. 12 Their responsibility is to equip God’s people to do his work and build up the church, the body of Christ… 16 He makes the whole body fit together perfectly. As each part does its own special work, it helps the other parts grow, so that the whole body is healthy and growing and full of love.

The concept here is pretty straightforward: each person has been given their own set of talents and abilities. Only by “unifying” these talents together can a group of people establish change. In the case of the Ephesians, it meant building a young church in the face of adversity. In the case of a startup, it means creating a new company in the face of risk and competition.

Let’s look closer at these five roles and see how they apply to startups:

Apostles – Thought leaders and visionaries, apostles are those who break new ground and challenge others’ view of the world. In the New Testament, the Twelve Apostles were those Jesus chose to establish Christianity. Tasked with developing a new religion in the face of very real persecution, the apostles of the early Christian church faced tremendous adversity in their task. Can you guess what the corollary in startups is? It’s the CEO and early founders: those who attempt to forge a new idea into a viable company. While company founders don’t have to face the risk of death in their pursuits (let’s hope!) their role requires a bold attitude and the ability to keep moving forward in the face of skeptics and competitors. While any startup requires it’s share of apostles, this role isn’t sufficient to get a company off the ground, as we’ll see in a moment.

On track to disrupt at least a couple industries, Elon Musk is a classic Apostle.

Evangelists – Evangelists make it their purpose to tell others about their beliefs and vision. They don’t necessarily set the vision (that’s up to the apostles), but they diffuse it, multiplying the reach of the apostles. Like apostles, though, evangelists also have to face doubters. They must possess the ability to win others over through intellect, empathy, charisma, and persistence. Evangelists in the early Christian church were responsible for converting others to Christianity. Their counterparts in startups are the salesmen, corporate developers, and marketers, who “convert” new relationships into partners, customers, and investors.

One of the early tech evangelists, Guy Kawasaki.

Prophets - This may seem like a stretch for startups, but not when you look deeper at the meaning of the word. It’s Greek root prophetes simply means “inspired preacher or teacher”.  In the Biblical context, prophets were inspired by God and cast a vision of what they believed would happen in the future. Relying on perception, intuition, and feeling, prophets are not unlike artists, who challenge our view of the world with their artwork. In the startup sense, prophets can take the form of consultants and advisors, often in the form of futurists. These visionaries look at how industry, technology, culture, politics, and other macro forces are interacting, and they predict what the world will look like in the coming years. While not as focused on implementation as other roles, prophets play an important part in helping startups challenge existing ways of thinking.

H.G. Wells told us much about what the future may look like.

Pastor - Pastors are simply those who care for others. They guard, protect, and nurture those in their custody. In the early Christian church, pastors were responsible for caring for young Christian communities that needed steady guidance and encouragement. In a startup, the needs of the young team are not much different. Faced with uncertainty about the future and lacking the cohesiveness that comes from working with others for a long period of time, startup teams need to be nurtured. A startup “pastor” may take the form of a special employee who has the rare talent of bonding people together, or in a more formal role, such as a human resources lead. In any role, pastors are crucial to developing and reinforcing a healthy company culture.

One of today’s leaders in developing a great company culture, Tony Hsieh.

Teachers - anyone who has a desire to know the truth and impart it to others can considered a teacher. Early Christians needed teachers to convey the lessons of Jesus and explain how they could be lived out in daily life. While we tend to think of teachers today as those formally employed as such, teachers in a startup can take many forms. It’s an engineer who helps his team understand a new technology. It’s the manager who makes sure his team understands the priorities of the company. It’s the analyst who looks closely at the way her company’s product is being used and provides insight into opportunities for improvement. And it’s the designer who helps his company adopt a common visual language in its products.

Leene Gade is awesome – head race engineer for Audi and the first female in that role to win the Le Mans 24 Hours, she knows how to teach her mechanics a thing or two.

As you’ve read this post, you’ve probably thought of a few people on your team who fit into these roles. Take a few minutes and review everyone who’s a part of your startup. Do you have strong players in each? Is everyone in a role that’s suited to their talents? What areas is your team lacking in talent?

Now consider what a team with solid players in each role would look like. You’d have a rich blend of people who can lead the formation of the company and set its vision (apostles), gain customers and advocates (evangelists), understand the future of your industry and your company’s role in it (prophets), keep employees empowered and happy (pastors), and ensure that the team is working on the right things and has the knowledge to execute (teachers). A pretty strong crew indeed.

Build for Everyone and You Build for No One

Standard

Imagine that you’ve headed to your local Ford dealer, trying to find a new ride. An overly friendly salesman approaches, wearing the requisite Ford-branded polo shirt. “Welcome! What can I help you with today?”, he grins at you. You start to explain that you’re looking to replace your old Camry, but before you can say more, he interrupts. “Great! We have just the car for you. It’s called the Ford Everyone.” Looking around the dealer, you now notice that there’s a strong similarity among most of the cars. They all look just alike… they are all alike you realize, confused. The salesman goes on. “We designed the Everyone to suit all needs. We knew that some people want to pull a boat, and it can kind of do that, as long as it’s not too big and there aren’t too many hills. We also realize that others are looking for something more luxury oriented. Look at those leather seats! Oh, but to keep the cost under $15,000 (hey not everyone’s rich!), there’s no A/C. No worries, though, doors aren’t included either, so you’ll get all the airflow you need. If fuel economy is your thing, the Everyone has you covered. Its 3 cylinder engine gets 40 MPG! Of course it only goes 50 mph, but who needs to highways anyway? Got hot rodding in your blood? Well, it’s kind of a hot rod, just look at the flames we put on the hood! And we know how important family is. Did you know that the average family has 2.4 kids? Guess what? The Everyone has 2.4 seats in the back!” This sounds pretty ridiculous, and it is. No car manufacturer would try to make something that pleases everyone (OK, maybe there are a couple exceptions), because no one would buy it. Yet this is the same struggle that startups go through when trying to find product/market fit. If an pre-product startup employee tells you he knows exactly what he’s building and who it’s for, don’t believe him! No one knows for sure until their idea is validated by customers who give you money in exchange for what you’re selling. But the test process can be just as confusing as it is helpful. Early beta customers provide all manner of feedback, often conflicting: “make it red! make it blue! I need it to have 2.4 seats! I don’t want any seats!” Since it’s so exciting to know that anyone is using your Beta Whatchamacallit v0.9, the temptation is to respond to all customer feedback as though it’s sage wisdom. And while customer feedback will indeed the most source of guidance for your product, trying to accommodate all of it will please no one and result in a mediocre product. So what to do? Here are three thoughts: 1. Make a guess and cast your net. Early on, you won’t have any customers, and certainly no feedback from them. But you still need to think hard about who your product is for, and why they’ll care about it. Write out your assumptions about a prototypical customer: we’re building this to help a owner/operators single-location restaurants reduce the cost of managing inventory. You might be wrong, but defining your target early on gives you something to reflect against later on. 2. Encourage and catalog feedback: Your first customers won’t all fit exactly within your target audience. Some will be friends, family, neighbors. The test period is messy like that. And if you have a dozen beta users, you’ll probably hear a dozen different ideas on what you should do differently. That’s OK. Don’t worry about whether feedback is what you want to hear or if it even makes sense. Just ask, listen, and share what you hear with your team. 3. Hone in. Go through this exercise enough and you’ll start to see where you can focus. The customers who most need what you’re building will be the ones who give you the most ardent feedback and ask the most difficult questions. But they’ll also be the ones who think that what you’re doing is useful enough that they’ll also keep using your product and even recommend it to their friends. It’s with these folks that you have the strongest chance of success. Especially if your beta product is very beta (i.e. it’s 3 PM and you can’t believe it hasn’t crashed yet today), you’ll find that your customers who need the product the most will be the most forgiving if something goes wrong. That will change one they start relying on the product, but that’s a topic for another post. We went through this at my startup just this past year. We have a product that’s generally designed to help local business with word-of-mouth marketing. In some locations where we thought it would be a home run, it bombed. But another vertical ended up being hugely responsive, and we decided to focus there. We catered our branding and design just to this group, and we ended up being featured on an industry podcast, getting some extra-nice treatment at some industry events, and even had people ask to come work for us! Along with that, we saw a solid amount of organic growth. We know that in the long-term, our customer base will be much bigger than this specific industry. But because we have found a customer that truly loves what we offer, we’re focusing primarily on them for the next chapter of our company’s growth!

Can an app get you hooked on sleep?

Asleep in Battery Park on hot day
Standard

Hooked: A Guide to Building Habit-Forming ProductsUnless you want whatever product you’re working to be ignored, go out and read Hooked: How to Build Habit-Forming Products, by Nir Eyal. It’s a short primer on the nuts and bolts of how products ingrain themselves into our everyday routines. As Nir puts it, “the ultimate goal of a habit-forming product is to solve the user’s pain by creating an association so that the user identifies the company’s product or service as the source of relief.” In the book, he outlines four components of a truly additive product:

  1. Trigger
  2. Action
  3. Variable Reward
  4. Investment

I wanted to see how well an app I regularly use stacked against these criteria. It’s an app called Sleep Cycle, which uses my phone’s accelerometer to measure the quality of my sleep each night. I’ve been using it pretty religiously for several months now, so I think it’s safe to say that it’s a habit forming product. Let’s see if it meets all of the criteria…

Trigger

There are four types of triggers outlined in the book, but just two apply here: internal and owned.

Internal is “When a product becomes tightly coupled with a thought, an emotion, or a pre-existing routine…”. Considering that I sleep everyday (it’s a great way to fend off insanity if you haven’t tried it), that’s a pretty solid internal trigger. I go to sleep; I am triggered to use Sleep Cycle. Since the app also serves as my alarm clock, it’s actually ingrained into two routines.

Owned refers to triggers that “consume a piece of real-estate in the user’s environment.” The app lives right there on the first page of apps on my iPhone home screen, so it does provide a trigger this way. For a phone app, though, “taking up a piece of real-estate” is pretty much a given, so I can’t give the app any extra credit here. However, app notifications fall under the umbrella of owned triggers, and it’s interesting that the app doesn’t offer any. I would think that setting up a simple reminder to “Turn on Sleep Cycle” at a set time every day would be a no-brainer.

I’ll give the app a 6 out of 10 here – the nature of the app lends itself well to routine, but it could go a lot further to remind new users to keep using the tool.

Action

The book references the Fogg Behavior Model, which says that “a given behavior will occur when motivation, ability, and a trigger are present at the same time and in sufficient degrees.”

We’ve already touched on trigger, so how about motivation and ability?

It’s easy to find motivation to sleep given the right circumstances.

Eyal defines motivation it as “the level of desire to take that action.” For a first time user of the app, the primary motivation is to “sleep better” (it works by waking you up during the correct point in your sleep cycle). That’s an interesting proposition (who doesn’t want to sleep better), but it’s fairly vague in terms of what that actually means. Further more, the App Store page used to market the app doesn’t go a long way to really sell you on the concept.

Ability is simply how hard it is for a user to take an action. E.g. using Craigslist vs filing your taxes. Sleep Cycle is pretty easy to use, simply turn it on and place the phone facing down on your mattress. However, to get real benefit from the app, you need to use it consistently, and there’s kind of a steep learning curve to wade through all of the reports. You also have to make sure the phone is plugged in, which is a pain if you’re just exhausted and want to go right to bed! Of course the final step can be pretty tough (you actually have to go to sleep), but that’s not the app’s fault!

Let’s give it a 5.

Variable Reward

“Without variability, we are like children in that once we figure out what will happen next, we become less excited by the experience,” Eyal says. This is why the math behind slot machines is so important. If you simply won a small, fixed prize for every, say, ten spins, the experience would get dull pretty quickly. Apps are no different.

This is where Sleep Cycle really shines. Each morning when you wake up, the app rates your sleep quality on a scale of 0 to 100. 100 being a perfect night’s sleep, and 0 being, well, miserable. Yes, I did get a perfect 100 once; it took me 9 hours 29 minutes back in December. My worst was a 29%. That was a rough morning. Most days it hovers around 80%.

But the great thing about the sleep “score” is that it makes you feel as though you can “win” at sleep. It’s literally a game. You really don’t know what your score will be in the morning (you might have a vague sense if you were up all night worrying how you’ll pay back that Mafia loan), so each morning starts with the itch to satisfy your curiosity about how well you did.

I’ll give Sleep Cycle an 8 here.

Investment

Eyal points out how several studies have shown that we tend to over-value things that we’ve spent more time doing: “Of course everyone likes hearing the accordion, I’ve practiced every day for the past 8 years!”

One of the ways investment manifests itself is through the accumulation and interaction with data. And boy does Sleep Cycle have the data. Not only is it measuring sleep quality each night, but it tracks quality by day of week, duration in bed, the time you went to bed, and more. You can even add something called “Sleep Notes”, which are basically tags assigned to each night. For example, if you regularly each 5-alarm chili, you can set up a “5-alarm chili” Note. The app will compare your sleep quality on days you ate said chili to days you had a normal diet. After a while, you might see that your chili feasts cost you major sleep points, and you’ll decide to back off the Tabasco a bit.

Real life example: I switched to a new mattress in early November, and my sleep quality consistently improved since then. Money well spent!

Sleep Cycle gets a 9 out of 10 here; the longer you use the app, the more valuable (and interesting) it gets.

Summary

If we average out these scores, Sleep Cycle gets a 7/10. That’s not a terrible score, but the app could much improve it’s use of triggers to encourage new users to use the app regularly. It’s the kind of product that if the user wants to make using it a habit, it’ll probably happen. But for the curious user who downloads the app on a whim, they’re unlikely to be turned into a habitual user through the “hooks” of the app alone.

If you haven’t read Hooked yet, give it a read. It doesn’t commit the sin that most business books commit of being way too long, but there’s enough useful information in there to be valuable to almost any reader. Cheers!

Your New Job: Are You a Savior or an FNG?

Standard

You may find yourself living in a shotgun shack 
You may find yourself in another part of the world 
You may find yourself behind the wheel of a large automobile 
You may find yourself in a beautiful house with a beautiful wife 
You may ask yourself, well, how did I get here?

- The Talking Heads, Once In a Lifetime

…and you may find yourself hired for a new job at a startup, in which case you might ask yourself, “well, what do I do here?”

This post is about exactly that.

First, imagine that all new hires are lined up on a spectrum. At one end you have the FNG; at the other The Savior. Who are these people and which one will you be?

FNG stands for “F**king New Guy”. It’s the guy who just shows up clueless, doesn’t know the culture, lacks any sort of useful knowledge (or the wherewithal to share it), and generally gets in the wayYou never really like this guy because he doesn’t know why he’s there, and neither do you. He stands around and just does what he’s told, and it’s exactly who Charlie Sheen’s character, Chris, became in the 1986 classic film, Platoon:

On the other end of the spectrum lies The Savior, the genius whose transformative insight or wisdom forever changes the way his company works. It’s the person every company aspires to hire. Unfortunately, finding a Savior is about as easy is spotting a unicorn. In the movie Moneyball, the Oakland A’s get lucky and identify one in Jonah Hill’s character, Peter. By looking at the struggling baseball team’s player selection process in an entirely new way, Peter completely reworks the way the team recruits and helps turn the organization around:

Obviously, no one envies Chris and few wouldn’t love to be as insightful as Peter, but what really separates the two? Here are three factors:

Attitude

The Moneyball clip doesn’t reveal this, but Peter started exploring new ways of selecting players long before he had any real influence on the A’s. He wasn’t hired to be “influential”, but he didn’t wait for his boss’s prompting before engineering an entirely novel player selection methodology. He just did it. The fact that Peter was at his first job and in a relatively junior position didn’t stop him, and it shouldn’t stop you. Just because you’re new and/or junior doesn’t mean you can’t start asking lots of questions and figuring out where you can add value. If you’re waiting around for someone to tell you how you can help, you probably won’t be around for long.

Perspective

Your naivety in a new industry or at a new company may be your greatest strength. In fact, it’s not at all uncommon for outsiders to use their unique perspective to help companies do things no one thought possible. Witness Steve Jobs’ disruption of the music and mobile phone industries; the exploits of Sir Richard Branson, who said, “My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them… “; and Alan Mulally, who brought Ford back to profitability despite having no experience in the automotive world. You may not be a captain of industry, but if treat your “new guy” perspective as an asset, you’ll go far.

Environment

Sometimes, the culture of a startup has just as much of an influence on how effective new hires are as anything else. The Vietnam military culture that Chris faced in Platoon certainly didn’t foster the development of new recruits, so fresh soldiers were all but guaranteed to be FNGs. Ask yourself: does the company you’re planning to join encourage new ideas and different ways of thinking? Have they asked for your perspective on problems they’re currently tackling? Do the people you interview with ask for your critiques on how the company can improve? If the answer to any of these is no, then don’t work there. Chances are, your new ideas won’t go very far. Instead, find a company who values your input, even if your ideas aren’t as helpful at first because you lack context.

Startups are quick to hire, and quick to fire, so hopefully this post moves you a bit less of an FNG and slightly more of a Savior. Good luck!

Will Non-Profits Participate in the Sharing Economy?

(Photo by: Stan Honda/AFP/Getty Images)
Standard

Jeremy Rifkin, a widely published economics pundit, argued last week that non-profts are going to play an increasingly important role as our economy shifts to a zero-marginal cost “sharing” economy.  (Example for the uninitiated: it costs Netflix nearly $0 to stream Ferris Bueller’s Day Off to your TV.)  

We all understand how Netflix works, but why does he think charities will be crucial to this transformation? In his words:

The answer lies in the civil society, which consists of nonprofit organizations that attend to the things in life we make and share as a community… we are constructing an Internet of Things infrastructure that optimizes collaboration, universal access and inclusion, all of which are critical to the creation of social capital and the ushering in of a sharing economy. The Internet of Things is a game-changing platform that enables an emerging collaborative commons to flourish…This collaborative rather than capitalistic approach is about shared access rather than private ownership.

…the new employment opportunities [will] lie in the collaborative commons in fields that tend to be nonprofit and strengthen social infrastructure — education, health care, aiding the poor, environmental restoration, child care and care for the elderly, the promotion of the arts and recreation.

I wanted to examine this a bit further. Are charities really going to be the driving force in enabling “shared access”?

First let’s take a look at a few companies that have been creating this sharing economy in the first place:

Airbnb – the archetypical example, Airbnb lets property owners lease out their homes directly to other travelers. I’ve used this in LA and it was fantastic. Cheaper than a hotel and the homeowner was gracious. Oh, and they’re being valued around $10 billion these days.

ZipCar – allows city dwellers to rent cars by the hour, day, etc. Hopefully they clean out the McDonald’s french fries left underneath the seat by the previous driver. Similar companies include Getaround and Relay Rides, which allow you to rent from individual owners.

Citi Bike – same thing as ZipCar, but for bikes. In NYC only right now. People ride these things a lot more than you’d think!

eBay – ever since I sold used parts of my crusty mountain bike in the early 2000’s, I’ve loved eBay. These days I’m focused on building out my collection of mannequin feet, but eBay is still the ultimate sharing platform.

TaskRabbit – people aren’t just selling goods, they’re selling their time, with services like TaskRabbit.

Fon – even wifi access is now being shared. With over 12 million members who share their home’s wifi with the Fon network, how many do you think are still named “linksys”?

Just Soles – ladies, if you buy a $600 pair of shoes and wear them 4 times before they go out of style, you just paid $150 each time you went out on that lousy date. That’s why Rent the Runway exists: you can rent fashion for the few times you need a special item at a much lower cost per use. Rent the Runway does the same thing for dresses.

That’s just a short list. Shared ownership and distribution is becoming a major trend, but I haven’t seen any non-profits contribute to this movement yet.

Why is that? It has to do with risk.

Any time an organization attempts to forge a new economic model, risk is involved. The risk is that the model doesn’t work, and whatever time and money went into the idea is lost. Zipcar has to face the financial risk of profitably buying, leasing out, and maintaining a fleet of cars in a much different fashion than traditional car rental agencies. Airbnb deals with the liability risk that renters won’t thrash the place where they’re staying. eBay deals with scale risk, as its model doesn’t offer value unless millions of people are using it. TaskRabbit and Just Soles are faced with competitive risk, as the services they offer can be easily duplicated.

However, non-profits are typically very risk averse, and they often aren’t in a position to risk their capital (or even their time) on endeavors that don’t have a clear outcome. Instead, they’re asked to do the things near and dear to donors’ hearts: feeding children, caring for animals, stoping diseases, and saving the rainforest. So it’s no surprise we’ve seen them on the sidelines thus far.

However, I think we will see two things happen as the sharing economy becomes more pervasive:

First, we’ll see a continued rise in alternative corporate structures, such as L3C (a low-profit limited liability company) and B (benefit) corporations. My hunch is that startup-minded individuals will find new ways in which a zero-marginal cost economy can solve social problems. There are already nearly 1,000 B Corporations, and the designation is only a few years old. Organizations like RecycleBank and Better World Books are great examples of this. I wrote about this while ago, and I still believe that the distinction between for-profit and non-profit will continue to break down.

Second, I think that partnerships between for-profit and non-profit companies will be more common. Not every company’s focus lends itself to solving social problems, but that doesn’t mean its investors don’t want to contribute. Toyota Cars for Good and Patagonia are classic examples of companies who’ve created strong support for causes in line with their products and values, even if they’re not tackling those problems head on.

Either way, the shift to a sharing economy will mean that both for-profit and non-profit companies alike will have to adapt. How do you think non-profits will participate in this new model?

Waving at Strangers (or 6 Brands That Bring People Together)

jeeps
Standard

In high school I used to wave at strangers all the time. No, not because I was awkward at meeting girls (OK, maybe I was), but because they (and I) happened to be driving the same particular brand of car. Can you guess it? Here’s a hint: “It’s a ____ thing, you wouldn’t understand“, reads a common decal that its owners like to place on their windshields.

That’s right… Jeep. Let me explain. Jeep owners love their Jeeps. Even more, they love talking to other Jeep owners. Why is why there’s an unpublished rule that when you’re driving a Jeep and you see another Jeep, you wave. And if you’re stopped next to another Jeep at a stop light, you might say something profound to the other driver, like “Hey, nice Jeep!”. At which point, the other driving will reply with something equally thought-provoking, like “You too, bro!”

Owning a Jeep means being part of something special, a community of owners who share similar passions. There are even Jeep Jamborees all over the country for those who want to pay money to drag their cars over rocks and meet other people doing the same thing.

The strong owner community is one of that Willys/Kaiser-Jeep/Chrysler (and now Fiat) has been able to produce and sell essentially the same vehicle for almost 70 years, with the open-top CJ that became available for consumers in the 1940s that turned into the modern Wrangler. That’s despite the fact that these cars consistently get poor reviews from Consumer Reports. Of course I have zero scientific evidence to substantiate this, but that’s one of the perils of reading my blog over The New England Journal of Medicine.

But look – when you by a Ford Explorer, you become a car owner. When you buy a Jeep, you become part of a club. For many, that’s reason enough to choose the Jeep brand over another. I consider this a competitive advantage for Jeep. It’s just not something most car manufacturers can claim they have. 

Unfortunately, strong customer communities are rare for brands, but here are 5 brands more brands that do a great job of bringing people together:

Airstream

I didn’t know that Airstreams were a thing until my relatives bought one. But going on “rallies” with other Airstream owners is a big event, and another reason to buy an Airstream over a less expensive brand. The largest Airstream club Wally Byam Caravan Club International, has over 14,000 members.

Minecraft

While many “social games” have strong communities of players, Minecraft is one of the few where you actually play with other people, simultaneously. In case you’ve never played, the game is basically Legos meets World of Warcraft. Its players have built some amazing things together, like this stunning recreation of Game of Thrones. And I thought I spent too much time on video games!

minecraftGOT

Harley Davidson

Does this really need an explanation? A Harley does the exact same thing as a Honda Goldwing, but you don’t exactly see droves of Goldwing owners banded together on a highway. Buying a Harley is the price of entry for joining any variety of riding clubs, ranging from those catering to suburban offices workers wanting to look a little badass to full blown outlaws.

CrossFit

Go to your run-of-the-mill gym, and chances are you barely talk to a soul while you’re there. If you do, it’s probably the buddy you brought with you. But join a CrossFit, and if you haven’t met at least a few people after a couple classes, you’re doing it wrong. The group orientation of the classes and the high  intensity they encourage really fosters a sense of camaraderie. And that’s a big part of what keeps members coming back.

1959737_10152237957559462_1621776518_n

Linux

A computer operating system built on the “free and open source” model, Linux has seen over 8,000 developers contribute to its code base since it was released in 1991. You may not run it on your machine, but more than 95% of the world’s 500 fastest supercomputers run some variant of Linux. It’s used widely by developers, with many cities hosting Linux User Groups to allow software engineers to learn from each other and share their appreciation for the operating system.

Know of any other brands that thrive on their strong customer communities? Let me know!

Delta’s Marketing Department is Better Than Yours

tab
Standard

If you haven’t seen Delta’s latest pre-flight safety video yet, it’s a riot. It’s the latest in a string of comical takes on the standard (and usually mind-numblingly boring) safety films that anyone who’s flown in the past decade is already familiar with:

OK, so I’m sure you laughed a little bit. But I wanted to break down why this video is such a win from a marketing perspective. Making a funny video is one thing. But making an otherwise dry by necessary production into something that people actually seek out to watch is another feat entirely. Let’s take a closer look:

1. It isn’t funny for it’s own sake. Delta (and presumably the FAA) really do want you to watch their video. The information it conveys could literally save your life. Making the video humorous ultimately serves to get passengers watching, which is a good thing. This is probably the most important lesson for anyone involved in technical writing or user experience: just because your subject is serious doesn’t mean that the message has to be. Of course, the Germans learned this decades ago: here’s the classic example.

2. Comedy doesn’t distract from the content. This is actually hard to do. But most of the humorous bits relate directly to the message conveyed at that time. For example, when passengers are told to ask flight attendants if they have any questions, they see a business man looking for help with his Rubik’s Cube. And it’s hard to ignore how to deal with oxygen masks, because seeing Arf don his own mask is pretty unforgettable.

I've never solved one either.

I’ve never solved one either.

3. The humor isn’t exclusive to a certain age group. Even if you didn’t grow up in the 80’s, watching the hair metal guitar player store his “ax” in the overhead compartment is going to make you laugh no matter what. So is the guy in the multi-colored track suit dancing the robot as he takes his seat in the exit row.

4. If you did live through the 80’s, the video is especially funny. It starts with watching the straight-laced business man place his Devo energy dome underneath the seat in front of him. References to mullets, Teddy Ruxpin, Gameboy, Atari, croquet, and Tab ensue. And the piece de resistance: seeing Kareem Abdul-Jabbar reprise his role in the classic movie Airplane, as Roger Murdock, the co-pilot.

"I'm sorry son, but you must have me confused with someone else. My name is Roger Murdock. I'm the co-pilot."

“I’m sorry son, but you must have me confused with someone else. My name is Roger Murdock. I’m the co-pilot.”

5. They didn’t overthink it. There are some temporal challenges with the video, namely that the passengers seem to have been transported from 30 years ago to the present. Not only are they seated in a modern 737 that doesn’t allow smoking, but they’re told not to use wifi, which doesn’t exist in their era. Delta could have stopped halfway through the script to realize “Um… this doesn’t actually make logical sense…”, but they pressed on. 

6. It respects the passengers. Perhaps Delta considered forcing everyone to watch the video by yelling in a thick German accent: “NOW YOO MUST VATCH ZEE SAFETY WIDEO!” But they thought better of that and actually decided to make the passengers’ day slightly better by making them laugh. They even give a nod to those who’ve flown with Delta for a little while: the red-headed girl at wagging her finger is supposed to be the original Delta redhead in their first lighthearted production several years ago.

"Smoking is NOT ALLOWED, on any Delta flight..."

“Smoking is NOT ALLOWED, on any Delta flight…”

This is marketing done right. Delta has effectively used humor to make its messaging more effective and to improve its customers’ view of the brand. Now can every other company who thinks it’s too boring to be interesting please take note?!?

Making the Most of a Travel Day (or Why Airports Conspire Against Email)

Standard

Some days at work you’re a productivity powerhouse. You’re cranking through projects, e-mails, to-dos like Paul Bunyan at a Christmas tree farm in December. Maybe you didn’t even check Facebook even once to see if your annoying friend form high school posted another #YOLO picture of himself. You’re in the zone.

When traveling, though, that feeling of zen just doesn’t happen. Your ability to focus is right up there with your ability to sweet talk that car rental agent into giving you a Camaro even though you paid for a Kia.

Why does this happen? When traveling, you’re constantly switching environments, and have only a vague idea of how much time you’ll be spending in each. Does this look familiar?

Office -> Car -> Security -> Airport Gate 1 -> Airplane 1 -> Airport Gate 2 -> Airplane 2 -> Airport 3 -> Taxi Stand -> Taxi -> Hotel, etc., etc.,

In a typical trip, you might switch environments nearly a dozen times. Not including the smaller changes, like having to turn your laptop off during takeoff, or stopping to pay for some healthy food a bag of Tropical Starburst.

It’s not long before you feel like this guy:

For some reason I believe that no one felt this way when traveling in say, the 1980s, when people still smoked during flights, and didn’t even know to ask “should I use Prodigy or CompuServe?”. But today, it’s ultra easy to get stuck in a “technology loop” while fleeting across the country. All you need is a iPhone, or perhaps a laptop with a just poor wi-fi connection at the airport (especially if the wi-fi connection is poor). Armed with the latest gadgets and 14 productivity apps, you think, “There’s no reason why my work pattern should be any different today, even though a baby is crying next to me and the man sitting next to me just had to take his call on speakerphone.”  Which is both false and impossible. But here’s what happens anyway:

10:07 – Check mail on phone. See 37 unread messages. Delete one that looks like spam. So productive!

10:09 – Start to read a thread that looks  important. Fail as the full message content refuses to load. Stare at the screen for 30 seconds while your phone makes up its mind about whether it has an internet connection or not.

10:11 – Let phone do it’s thing while you try the airport wifi on your laptop.

10:15 – Finally get your computer to connect to the “free” Boingo wireless hotspot. Wonder what their ridiculous looking guy with the grey suit and red bag is running from.

10:17 – Load the same 37 unread messages on your laptop. Including the same spam message you thought you just deleted on your phone.

10:20 – Read that email thread you thought needed attention.

10:21 – Start to write a thoughtful response.

10:22 – Hear on the PA, “Ladies and gentleman, we are now boarding Zone 1…”

10:23 – Cry inside

There, you just spent 16 of your life in a very busy but utterly unfruitful attempt to Get Something Done. And you’ve actually made yourself worse off, because you’ve depleted a good deal of mental energy reserves hassling with everything.

This happened to you not because you’re not being productive enough, or because your using the wrong tools, or because AT&T’s coverage sucks (which, it does). It happened because you fell into the trap of trying to replicate your office workflow while in a very different context. You’re like the person that tech companies like to feature in their commercials, who believe that we all want the ability to check email while climbing a mountain:

Checking email on a hike can only lead to loneliness.

What to do? The idea isn’t to ignore your work, not to travel, or use this as an excuse to buy the latest phone. Instead, ask yourself this one question every time you face a disruptive environment:

What can I do right now that I can perform at 100% effectiveness?

The answer is usually not the thing you’re attempting to do at the time. Writing email while waiting to board the plane? You’re maybe 25% as effective. Working on that spreadsheet while in the back of a taxi? I’ll give you 15%. Working on that presentation when you have 10 minutes left to use your laptop? You’ll barely get warmed up before you have to stop.

Instead of trying to do what you would normally be doing at 10:17 in the morning, flip your approach around and find the thing that you can do the absolute best, right now.

The answers will vary from person to person. For me, I can listen an audiobook at full attention in nearly any environment (Audible is my friend). I can actually do spreadsheets quite well on a plane. And taxis are a great place for me to make phone calls. Airport security line? Still working on that one.

Try keeping this question in mind next time you have to face a hectic day. You may not get as much pure office work done during  travel, but you’ll end the day with greater mental energy and an increased ability to focus on the more challenging things. Like writing a blog post.

Got any more thoughts on how to make the best of a travel day? I’d love to hear them.

3 Excel Pro Tips for Helping Others Not Hate You

Standard

I came across a horribly convoluted Excel spreadsheet this week. This wasn’t hard to do. The thing with Excel is that once you have a simple, working model that gets the job done, there is always the temptation to add just one more input, one more variable, one more tweak, to the point that your model is now so complex that only you can understand it. This only leaves your boss scratching his head and wondering why he hired you to make things that he can’t use. Or even worse, leads to being asked this question:

Which leads to the point of this post: no one cares how fancy your spreadsheet is, they only care if they can understand it.

It took me maybe 3 or 4 years to get this, because for a long time, I was that guy. The one who would find a way to combine multiple obscure functions into a calculation that ran off the edge of the screen. Try explaining how this works to someone else:

=IF(SUM(OFFSET(google!$E$1,MATCH($B$3,google!$A:$A,1)-1,0):OFFSET(google!$E$1,MATCH($B$2,google!$A:$A,1)-1,0))=0,””,SUM(OFFSET(google!$E$1,MATCH($B$3,google!$A:$A,1)-1,0):OFFSET(google!$E$1,MATCH($B$2,google!$A:$A,1)-1,0))/SUM(OFFSET(google!$B$1,MATCH($B$3,google!$A:$A,1)-1,0):OFFSET(google!$B$1,MATCH($B$2,google!$A:$A,1)-1,0)))

What? I made that and even I can’t figure out what it does without some serious effort. I wouldn’t stop there, though; I would find a way to extend this madness over multiple tabs, making even my computer wince just at the thought of opening Excel.

In the beginning I thought this approach was fine. Surely, everyone must be SO impressed by how complex and precise my models are! And how useful it will be to our company now that we can model out revenue scenarios using relevant data such as the weather in Japan next Tuesday and the average wind speed velocity of an unladen swallow. 

This was my attitude for years. I had earned my Merit Badge in Excel and was proud of it.

But when I found myself on the other end of the equation, as the guy trying to wrap his head around the monstrosity someone else had made, I found myself saying “Oh….”. As in, “Oh, dear God, how am I supposed to use this thing?!?”. Which led to the even more horrifying realization that I had been inflicting this type of pain on others for years, unintentionally torturing co-workers and investors by asking them to understand a maze of formulas, columns, and rows that looked like it had been created in a drug-induced fever dream of mine. Oh, indeed.

Many consider navigating this to be a more favorable option than dealing with a Byzantine spreadsheet.

Many consider navigating this to be a more favorable option than dealing with a Byzantine spreadsheet.

Now that I know better, I’m a recovering member of Excel Freaks Anonymous. And I’m trying to make my spreadsheets much more user friendly. To help me get there, I created these 3 Excel Pro Tips for Helping Others Not Hate You, which I will share here:

1. Don’t confuse precision for accuracy. Just because your spreadsheet can handle forty different inputs doesn’t mean that your forecast is any more accurate. There’s probably already a huge margin of error involved in your model, because so much of what you’re doing is guessing anyway. Adding more variables than necessary will only make it more difficult for someone else to figure out how your model works.

2. If you have to be complex, give directions. OK, sometimes you do need to include those forty different inputs. Maybe you’re launching a space shuttle. Or perhaps you’re just trying to visit that chocolate factory you’ve always wanted to see and are attempting to predict the location of the next golden ticket. In those cases, pretend you’re going to walk your grandma through your spreadsheet. Write comments. Highlight sections where inputs are taken. Break complex formulas out into simpler ones so readers can walk their way through a calculation. Most importantly, take the time to lay out your work in an intuitive manner. Your grandma will thank you.

3. Colors are your friend. And you have so many to choose from! Using color to signify related data and to call out special attention will have you wining friends in no time. Here’s an example: all hard coded data is blue, formulas are black, and inputs are green. Just don’t go crazy and make your spreadsheet look like an Easter party. A dab will do.

So if you’re an Excel-meister, be kind next time you craft a spreadsheet and make something others can actually understand. And if you have any more Pro Tips and want to further humanity by sharing them here, please do!

Does Facebook’s $19B purchase of WhatsApp make sense?

Standard

logo-color-verticalMost of me wants to say no. Only for two reasons.

One, WhatsApp would be in kindergarten if it was a child, and its entire staff could fit on a Greyhound bus. Seeing them valued at the same market cap as a company like Sony makes my brain hurt. Oh, and they make about as much revenue as a bag boy does at the local Kroger.

Two, I’m jealous. I’ll admit it. How can I not be? A valuation of around $500-million per employee is any startup’s dream. If our company hit 1/10 that valuation I’d have a grin glued to my face. Fortunately, I’d make enough so that I could afford surgery to restore my face to normal.

But after I thought it, I don’t think Zuckerberg is insane. While there’s no revenue model in the world that can justify that price for a service that barely brings in revenue (and certainly isn’t profitable), I think that Facebook was more likely to be asking themselves, “How much is it worth to keep someone else from buying WhatsApp?”.

Yes, Facebook is the world’s largest social network and is already a bit more Orwellian than most of us would like. But it’s no longer the place to be, especially among teens. Facebook even admits that:

Just a year ago, 42% of teens surveyed told pollsters they preferred Facebook to all other services; by spring, that had fallen to 33%, and now stands at 23%.

In other words, Facebook can’t assume that younger people will continue to see its service as the de facto place to share selfies. Teens have Instagram (which Facebook bought), SnapChat (which they tried to buy), and WhatsApp (bought). And let’s not forget Twitter, WeChat, Line, and Viber (each with at least 200 million users) competing for market share. With over 450 million users on WhatsApp, Facebook would take on a huge penalty should it fall into the hands of a Google or a Yahoo!.

Facebook itself only took a handful of years to go from dorm room project to international behemoth; what’s to keep another social network from displacing it in short order? That full discussion is probably worthy of a separate blog post, but the short answer is not much. At this point, Facebook has to be just as defensive (by keeping other large networks from coming under the control of a competitor) as it is offensive (by continuing to pursue both user and revenue growth).

Is $19 billion the right amount to pay for that defense? We’ll never know for sure, but if it keeps Facebook relevant with teens and holds off a challenging social network from displacing it for a few more years, the answer is yes.

Don’t Pay Me for Using Facebook

Standard

If there’s a movement to force social networks to pay content creators, let’s kill it now. New York Times columnist Joe Nocera recently outlined a book called “Who Owns the Future”, by Jaron Lanier. In it, Lanier argues that,

“people should get paid whenever their information is used. …creators of content — whether a blog post or a Facebook photograph — would receive micropayments whenever that content was used. A digital economy that appears to give things away for free — in return for being able to invade the privacy of its customers for commercial gain — isn’t free at all”

In practice, a company like Instagram would pay you a few cents for a photo of that latest sushi dish you tried; WordPress, maybe a nickel for your most recent rant about the continuing escalation of violence in schools.

I haven’t read Lanier’s book, but the premise is interesting. What would a digital economy look like in social networks were required to pay content creators?

I don’t think it would exist much at all.

Walt and Skyler actually made all their money by posting pretentious Instagram pics of fancy food.

Why? Nearly every major social network has thrived by investing in product, user experience, and growth first, and worrying about monetization much later. Forcing payments into the mix early on would only keep new social networks out and reinforce the position of incumbents.

Let’s start by looking at why new social networks operate this way:

First, scale has to come first. A social network with doesn’t really add much value until it can help its users connect with others in a meaningful way. This only happens when millions of people are using a service.

Secondly, asking users to pay for access, especially early on, is unrealistic. Early adopters aren’t going to open their wallets to try out the latest way to share photos with a few other early adopters. A pay wall would dramatically stifle growth, putting a huge damper on reaching scale.

Third, social networks don’t offer ad products or other monetization channels early on, because they need to focus their energies on a great product that will scale quickly.

Because of this, social networks almost always operate on a limited- or zero-revenue business plan for years. As a result, nascent social networks don’t even have revenue available to give to content creators, even if they wanted to.

Now, imagine that a system that required such payments. In order for a new, disruptive, social network to thrive, it would have two options: (1) use its precious startup capital to begin paying content creators from day one; or (2) force itself to adopt a monetization strategy well before the product was fully evolved. In either situation, the startup would find itself at a severe disadvantage in competing against big dogs like Facebook, Twitter, Google, and the like.

Ok, you’re thinking, but what if social networks weren’t required to pay content creators until they started bringing in revenue? That would still create some major issues:

First, investors and entrepreneurs will see these payments effectively as a tax on future earnings. This makes the prospect of starting or investing in a new social network inherently less attractive, as the opportunity for profit would be hampered to some degree (and probably a substantial one of those payments are going to be worth anything meaningful to content creators).

Secondly, this would actually be worse than a tax, because it would be required even before a company reached profitability. (I cannot imagine that such a system would be calculated on the basis of a company’s profitability, since young companies often eschew accounting profits to reinvest in the business).

Third, this would open up the opportunity for profitable, scaled incumbents to simply pay slightly more than social network upstarts. This would give content creators one less reason to contribute to a new social network, as they could earn more money elsewhere. Again, this would only lessen a startup’s likelihood of success.

In short, the environment for creating a new social network would be less favorable, and we’d see fewer and less interesting startups in this space as a result.

Mr. Lanier’s view might be more palatable if there were no new social networks, and our society was only concerned about “Big Brother” level companies like Google and Microsoft extracting wealth from ordinary folks without offering enough in return to society. If such a system is ever going to work, we’ll need to find a way to keep encouraging new companies to disrupt the space and add value in unique ways.

Some challenges for Facebook’s Graph Search

Standard

Facebook’s upcoming Graph Search feature has already been plenty hyped, even though its weeks away from a significant portion of the public being able to try it out. But in order for Open Graph to be meaningful, it’s going to have to tackle some significant barriers.

Let’s take one of it’s core promises – that users will have powerful search tools for local businesses available to them, by tapping into data about what one’s friends have Liked. Ostensibly, a user could utilize the recommendations of his friends to, say, find a good restaurant in a town he’s visiting. “Social curation” is the idea. But in order for this to work, let’s break down what has to happen first.

Let’s say I plan to visit Atlanta and want to find a suitable place for dinner. I have a handful of friends there (I live in KY), so this is a viable scenario. I search for “Restaurants my friends in Atlanta have Liked”. In an idealized world, I’d have a nice little list of places my friends have visited, and a few moments later, I’d have made a reservation and moved on.

OK, but not so fast. How many decent recommendations am I likely to get? I’m not sure it will be many, if I look at the filtering that has to happen first:

Image

I’m going to do some back of the envelope math here. I don’t have any data on this, so this is just pure guesswork. Let’s say I have 30 friends who live in Atlanta. 5 are ultra concerned about privacy, so they’ve kept most of their Like data private. Another 12 use Facebook regularly, but don’t care about Liking or Checking In every place they visit. I can’t expect decent data from them. Down to 13. Let’s say that 7 of the remainder don’t really share my tastes – they’re acquaintances, in-laws, or people who simply enjoy different things that I do. OK, so I’m now left with all of 6 people who have Liked restaurants on Facebook in Atlanta. But I’m not done yet – Atlanta is a big place, if a recommendation is across town, then forget it. And what if I have a recommendation for a fast-food cajun place nearby, but I’m actually looking for something upscale?

You get the idea. Even though the amount of information Facebook has in aggregate is mind-bogglingly massive, the amount of useful data that an individual user can obtain through her friends is quite different. Presented with the scenario above in real live, I’m still going to turn to something like Yelp, Urban Spoon, or TripAdvisor.

All of this isn’t to say that Graph Search won’t work or be useful. It could be tremendously useful. But in order for that to happen, Facebook is going to have to provide users with more of a reason to share data about where they visit and what they do. Otherwise, I’ll take the recommendation of 500 strangers over 5 friends any day.

A little inspiration from Detroit

Standard

The picture of me that was printed on my temporary ID badge made me look creepy. The security guard had taken the photo just as I let my smile go, so I looked slightly sinister. But I wasn’t allowed inside without a badge, so I stuck it on my jacket anyway. He handed me my driver’s license back, and motioned me to pass through the metal detector. I was already a bit unsettled; locked doors and video cameras were the only things that had greeted me outside the facility. Having to pass through more security than required at the airport didn’t help. Once inside, the heavy heels of a security guard’s boots against the polished linoleum floor were the only sound punctuating the silence…

This was my first time visiting a place like Western International High School, based in urban Detroit. Have you ever read one of those articles about the difficulties U.S. schools are having, with dismal test scores and rock-bottom graduation rates? This is one of those schools. Not only are things tough academically, but students have plenty of other challenges as well. Nearly all of them qualify for free lunch because their families are too poor to afford much food. Many are asked to join gangs, and do. Some have even had family members murdered. What’s most telling of all is that when students do succeed, teachers say that they do so “in spite of their parents.”

In Malcolm Gladwell’s bestselling book, Outliers, he postures that one’s success in life is necessarily a direct function of one’s IQ, test scores, or even hard work. Rather, he believes that circumstances play an overwhelming role in determining the outcome of one’s life. Well, the circumstances for these high schoolers are about as poor as they can get. And one of the most frustrating things about visiting a place like this is that as an outsider, changing those circumstances seems impossible. So while I expected my visit to leave me feeling despondent about grim outlook for these kids, that was hardly the case.

Why? Nearly 100 students at Western International HS take part in an after-school program coordinated by a non-profit called buildOn (disclaimer: buildOn is a partner of Sojo Studios, where I work). These students surprised me because they exuded hope and confidence, not despair. I had a chance to listen to several of them speak about their experience with the program. They weren’t any more gifted or talented then the rest of their class, but they were setting an example for others. They talked about how they had come to begin valuing their education. I listened intently as they described how they enjoyed doing community service on weekends. One boy talked about how he was able to finally develop self-confidence, something that had always eluded him. Another girl shyly boasted about the full scholarship she’d won to college. Her friend talked about the eye-opening experience she’d had helping build a school in Nicaragua – braving a huge step way outside her comfort zone to help kids in another part of the world.

This wasn’t a program students had been forced into by their parents or teachers. They’d joined because they were interested in taking a stop towards improving their chances in the world. These were students, whose peers were statistically likely to end up jobless or in prison, now talking about how empowered they felt in being able to improve their lives, their communities, and the world. In case those examples don’t adequately illustrate how these students defy circumstance, here’s the clincher: 95% of them will go on to college. That’s in a school where less than half will even finish high school.

While there are nearly 1400 students at Western, those 100 illustrate that the cycle of poverty and desperation can be broken. They show us that kids don’t have to be brought down by a poor environment. Not only are they improving themselves, but they’ll inspire their friends and their community, too. Fundamentally, they want to achieve the same things as any high schooler does, and they’re willing to work for it. They just need to be shown the way. For me, coming to that realization is one of the most hope-inspiring experiences I’ve had.

Game mechanics for causes – Catalysts for Change

cfclogo
Standard

Nothing is more captivating than a well-thought out game. That’s why more and more initiatives are building games (or using game mechanics) to create positive social change. Here’s a new one that launched today – it’s called Catalysts for Change, and it gives players a game-like competition for sharing and responding to ideas about solving the world’s social problems. It’s a bit like Quora meets Twitter meets Trivial Pursuit. Here’s a video they put together that provides a brief overview:

One you sign up, you’re asked to submit “cards”, which are basically suggestions or responses to specific issues. From there, you can browse individual cards and “chains” of cards composed of a string of responses from various players. A scoring system gives you points based on your submissions and the responses the’ve received, and there’s even an achievements system for those who really commit to playing. Here’s what the game’s dashboard looks like once you start playing:

The challenge with any game-like initiative is that if the game itself isn’t fun and engaging, then it’s a missed opportunity to really connect with people. Traditional game developers will readily admit that it’s not easy to create captivating titles, and socially-oriented games have an even bigger hurdle with the added goal of educating or empowering their players. Can Catalysts for Change pull it off and accomplish something really meaningful? Give it a try and find out for yourself! The game ends in less than two days, at 12:00 EST on Wednesday, April 5, so hurry.

Adopting failure and risk in the non-profit world

risk
Standard

For-profit businesses publicly fail all the time. When they do, it’s not the end of the world – learning from one’s mistakes (and those of others) can be an enormous factor in long-term success. In the non-profit world, though, failures are often swept under the rug. But since non-profits deal with lives, not dollars, why isn’t “learning from failure” a more widely adopted practice?

A new service called Admitting Failure wants to change that. In this post, we’ll look at why the for-profit world is able to learn from failure, and examine what Admitting Failure is doing to help the non-profit world achieve the same thing.

Failure is natural in business

Failure never tasted so good.

When Apple came out with the $700 Newton PDA in 1993, it didn’t exactly vault the company to success. In fact, it was one of the company’s most ridiculed products. And when Pepsi launched a massive marketing campaign to convince us to drink Crystal Pepsi, the clear cola didn’t live long. But even successful companies prepare to fail from time to time. What makes failure such a natural part of the business world?

Reward for taking risk. Trying something new is often what allows companies to achieve breakthrough success, and that requires risk and the occasional failure. Sometimes “playing it safe” by not taking any risks is a sure way to slowly kill a company.

Investors tolerate failure. A good investor diversifies his portfolio, knowing that some companies will yield negative returns. It’s an expected outcome that factors into any good investor’s calculations.

Failures are made public. Talk show hosts and business blogs alike love to poke fun at “game changing” products that no one bought. Business schools thrive on doing case studies on corporate mistakes. Since everyone is exposed to failures in business, they’re not always a surprise. And even better, there’s a wealth of information out there for anyone who wants to learn from the past.

Non-Profits aren’t allowed to fail

Warfare might be a bit too risky for non-profits, but you get the idea.

If the world’s most successful companies fail from time to time, it goes without saying the even the world’s best non-profits are going to make mistakes too. But unfortunately, non-profits aren’t allowed to fail publicly the way businesses are. For one, there isn’t a massive reward for taking massive risk, so non-profits aren’t as encouraged to experiment.

Secondly, donors aren’t yet comfortable with their dollars being used for experiments, which means non-profits are less likely to try unproven ideas. And there’s no forum for failures to be widely publicized, so logistically, sharing failures in the non-profit community would be hard to pull off anyway.

Can Admitting Failure change the status quo?

Admitting Failure addresses the problem of “private failures” in the non-profit community primarily by addressing the logistical issue – no common forum for non-profit failures to be disclosed and discussed. The platform is a good start; take a look at this post from charity: water about the failure of one of their metrics:

…you have probably heard us say, Tweet or write: $20 can provide clean and safe drinking water to one person for 20 years. But earlier this year, we removed the “20 years” part from that messaging.

As with any retraction, this sparked a discussion with our staff about how we deal with failure… we knew that if we continued to promise that each $20 donation would provide one person access to water for two decades, we’d be using a number we’re not certain about. In effect, we’d be failing the faith of the public and our mission to “reinvent charity”—to restore peoples’ trust in charitable work…

In a way, showing the public where we’ve messed up or why we want to suddenly move in a new direction is like taking a deep sigh of relief. We’ve given ourselves the chance to share the hard stuff. We’re sparking important conversations and welcoming scrutiny because we really have nothing to hide.

Donors need to think like investors

Donors should be more like this guy.

charity: water deserves praise for taking the lead on admitting their own mistakes. But while Admitting Failure solves an important part of the problem, real change won’t happen until donors begin to act differently. In the business world, successes and failures are disclosed so readily because consumers experience and discuss them, and because investors demand disclosure.

So while example like charity:water are fine, non-profits won’t ever widely disclose failures until donors begin taking the approach of an investor. Donors need to encourage the non-profits they support to experiment, make mistakes, and share their learnings. They need to diversify their donations, to improve the odds of them supporting a truly successful project. And most of all, they need to let non-profits know that it’s OK to fail once in a while. Here are three ways Admitting Failure could help them do this:

  1. Give donors tools to encourage their favorite non-profits to participate on the site. They could even take a page from Invisible Children‘s playbook and give users a one-click method to target high-profile non-profits on Twitter.
  2. Rate charities, in the fashion of Charity Navigator, based on the knowledge they’ve contributed to the non-profit community. Messaged correctly, charities who developed a reputation for being honest could benefit from additional donor support.
  3. Allow aid recipients themselves to share their perspective on a non-profit’s work. Nothing’s more authentic than the experience of a person who was targeted by an aid program, so this would be a great way to build a 360-degree perspective of a non-profit.

What do you think – are non-profits likely to admit more mistakes, if only given the right tools? Or do donors need to become more involved before any real change can take place?

Being Humble when you’ve raised $12.6 million

Screen Shot 2012-03-22 at 12.50.29 AM
Standard

What would your reaction be if you walked into Starbucks and the barista told you that you could pay whatever you wanted for your coffee? Oh, and if you wanted all the money to go to charity instead, that’d be cool, too? In addition to buying 17 carmel macchiatos with the 13 cents you found in your pocket, you’d also probably wonder who in Seattle lost their sanity.

Well, that’s exactly the pricing model Humble Bundle offers. They provide limited-time offers on bundles of video games, in which buyers set their own price, and then choose how much goes to charity. The latest bundle, simply called “The Humble Bundle for Android 2″, was released just this week. How does it work? Instead of being one of those blogs that just regurgitates content found elsewhere, I’ll just point you to their video:

Here are some stats on their success: 2 years old, 2 million transactions, and $12.6 million raised for developers, charity, and themselves (the exact breakdown to each party isn’t made available). It’s an interesting pricing model that’s likely raised a handsome sum for charity, but could it be applied to other types of products as well? Let’s take a look at what makes the Humble pricing system tick and see where that leaves us:

Acting like the boss

When you learn that your boss at your new job doesn’t come into the office until 10:00 AM, you learn that’s OK if you don’t want to arrive until after 9:00. When he shows up in jeans, you can confidently come back to work the next day in that acid washed denim that’s been in your closet for 26 years (right?). He sets the norm; you feel better because you know what’s expected. Humble Bundle does the same thing. They start buyers off with a default split of 55% to developers, 30% to charity, and 15% to Humble Bundle. Hard to feel anxious about getting the allocation wrong, when a strong suggestion is made for you.

A gentle guilt trip

Humble Bundle does a couple smart things to encourage you to pay a legit price. First, they show real-time data for the average purchase amount. If you decide to pay less then that, they’ll remind you with a nice blue warning banner before you pay. Secondly, if you pay more than average, you actually get an extra game. It’s a slick combination of guilt and rewards to keep buyers honest.

Freeloaders don’t (really) count

Some users are going to pay only a few cents for these games. But in addition to not being cool, they’ll also be negated out by the thousands of buyers who do pay a reasonable price. A high transaction volume (over 70,000 just three days in) keeps the moochers at bay.

Standard fare

Downloading video games is becoming pretty standard. You do have Angry Birds, yes? Even though the pricing model is strange and new, everything other aspect of the promotion is standard fare. That’s important, because if potential buyers are asked to digest too many unfamiliar pieces, they’ll leave.

$0 marginal cost of distribution

This one’s pretty boring, but it’s one of the most important. Downloadable digital goods cost next to nothing to distribute. Each copy sold costs about $0.00 to make and deliver. So if a user pays a mere penny, no one is any poorer for it.

Obscure quality

It’s indie developers who submit games to these bundles – newer companies who are relatively unknown. Even if these developers don’t make much per copy sold, they still benefit from the increased exposure and gross sales. Gamers benefit, too, by being exposed to quality games they may not have discovered otherwise.

Limited time

If “set your own pricing” were available all the time, then that would customers to expect such treatment all of the time. That’s not sustainable, and it certainly won’t make developers happy. (Is there any reason why an “add your own donation” piece couldn’t stick around forever, though?)

That’s a long list of things that contribute to the success of the model. Could this work elsewhere? Not at Starbucks, but I think there’s plenty of ideas here that could be applied to online retail, for one. Where else do you think a Hunble-esque offering would do well? Let’s hope that Humble Bundle continues to be successful, raise gobs of money for charity, and encourages others to follow suit.

Is the criticism of KONY 2012 legit?

kony-2012-521x800
Standard

 It’s been a full week since Invisible Children launched their now-famous “KONY 2012″ film, which seeks to raise awareness of Joseph Kony, an African war criminal who’s responsible for the death and abduction of thousands of children. Seven days old, and KONY 2012 has garnered nearly 100 million views. With all this attention, both the film and Invisible Children itself have received their fair share of critics. Are the attacks warranted? In this post, we’ll deconstruct the criticism and find out.

But first, if you haven’t seen the film, watch it now:

Here’s a short list of what the critics have been saying:

There are several issues raised, but we’ll examine three of them here: (1) the way in which Invisible Children allocates its funding; (2) a critique of the film’s message and it’s “truthiness”; and (3) that the film and Invisible Children promote “slacktivism” instead of real action. Let’s tackle each of these directly:

Finances

Invisible Children has been called out an apparent lack of funding that is used on “direct” programs, i.e. work on the ground. Things like building schools and building radio towers. A cursory glance at their finances reveals that “only” 37% goes towards African programs. Typically, non-profits that primarily engage in “on the ground” work will allocate 80-90% of their expenses to those programs, and the rest towards overhead and fundraising. If Invisible Children were a traditional non-profit, then that number would be appalling. But Invisible Children isn’t a typical charity; instead; filmmaking and advocacy are also core parts of their mission. Making documentaries and educating people about Joseph Kony is what they do. If you look at their expenses used on all three of these programs, you’ll find that they’re just about as financial efficient as any non-profit. So as long as Invisible Children makes it clear that direct work is just one of their focuses, along with film-making and advocacy, this shouldn’t be an issue. And for someone who wants to educate others about Joseph Kony, supporting Invisible Children would be a great way to do that.

The Film

How many documentaries are you aware of that have universal appeal, and were made without bias? I can’t think of many either. Much of the criticism of the film itself has to do with it delivering an over-simplified message. Other critics point out that the film promotes that idea that Americans (and white people) are the “saviors” and that Africans aren’t capable of helping themselves. Those are valid points, and the film isn’t without its faults. But let’s also consider a few other factors. Who is the film intended for? Invisible Children focuses mainly on educating high-school kids, college students, and young adults, many of who are unlikely to know very much about foreign issues. And their audience isn’t as interested in sitting through a lengthy, comprehensive documentary as a foreign policy expert would be. So the fact that the film focuses on delivering a simple, easily understood message makes sense, considering its target audience. If the goal of the film is to engage a young generation around a pressing issue halfway around the world, then KONY 2012 is an astounding success. If it were to educate viewers on the long and nuanced history of war crimes in central Africa, then it would a failure, but that was never its intention.

Slacktivism

“Slacktivism” is a disparaging term used to describe feel-good actions that don’t have any real impact. When someone merely tweets about a cause and says “I’ve done my part”, that’s slacktivism. You’ll find Invisible Children accused of promoting slacktivism in more than one critique. If KONY 2012 campaign merely engaged 100 million people for 30 minutes and nothing else resulted, then yes, Invisible Children’s efforts would be pretty meaningless. But let’s not forget that no real action can start until people are aware of an issue. Sure, merely watching or sharing a video won’t do anything to directly change anything in the world. But that’s just as true for a film about Joseph Kony as it is for an IMAX movie about rescuing orangutans and elephants. But I don’t hear many people cracking down on IMAX movies, do you? Educating people about a cause is a first, and necessary, step to get people involved. In fact, Americans already suffer from a pretty severe lack of global awareness, so films like these are a great way to prevent future generations from becoming ignorant and passive about the rest of the world. Efforts to enlighten others about issues that cause human suffering in the world shouldn’t be criticized, they should be championed.

Invisible Children’s Response

This post wouldn’t be complete without including Invisible Children’s own response to criticisms KONY 2012, which they’ve done here. Their CEO also did a decent job of addressed detractors in this video, which he posted today:

Whether you agree with Invisible Children’s KONY 2012 campaign or not, the important thing to watch is the results. What will happen now that nearly 100 million people have seen their latest film? Will our government change its support African troops in arresting Kony? Will children in central Africa be any safer? These questions are the ones that matter. If Joseph Kony is brought down and kids in central Africa can begin live without fear, then Invisible Children should be applauded for their efforts. Share your own thoughts in the comments below.

Does Giving Get Any Easier?

Screen Shot 2012-03-06 at 9.09.58 AM
Standard

Concepts that turn people into first time givers are always interesting. Converting a “non-giver” into a “giver” isn’t an easy hurdle, but it’s a crucial one: no one will ever be a lifelong donor until that first dollar has been given. So while it’s not uncommon for non-profits to ask for $5, $10, or even $25 for a first time ask, a new site called Philanthroper rachets that number all the way down to a buck. It’s as easy a donation experience as I’ve found anywhere.

Here’s how it works. Each day, Philanthroper features a new giving opportunity. One day might offer the chance to send a child to school for a week, another, a way to support bone marrow transplants. All users are asked for is a dollar, and it takes only three clicks to donate via PayPal. Users can even give more if they’re so inclined. Philanthroper delivers a clear, straightforward way to get involved each day, and it boils down the decision to give to merely a few clicks. For someone who just wants to help out a bit, this is about as painless as it gets.

In addition to creating very low barriers to giving, Philanthroper also promotes the idea that the small actions of many combine to make meaningful results. They’ve done a great job of quantifying the impact its users have had, as this iconograph illustrates. Instead of talking about only the dollars donated, Philanthroper celebrates what those dollars meant, by counting things like the “days of education”, and “number of immunizations” provided. Donors who’ve only given a dollar don’t feel like they’re being cheap; they’re made to feel like they’ve actually made a difference. Powerful stuff.

Is the “dollar a day” model enough to keep users around, though? There’s not much to keep donors engaged beyond the opportunity to give more money, so Philanthoper will likely need some “power user” features for users who want to step things up a notch. They have started a stats page (here’s mine), but there’s not a whole lot there that’s worth revisiting. But altogether, Philanthroper is great “gateway” into causes – it’s low friction, very easy to use, and with wide variety of causes featured, there’s something that’s likely to nearly anyone into a first time donor.

Give it try (come on, you can at least give a buck!) and share your thoughts.

Will Causes end up the Yahoo! of web philanthropy?

logo_causes_transparent1
Standard

Causes.com was one of the more exciting things to happen in the online philanthropic space when it launched in 2007. Here was a charitable platform that offered something truly unique at the time – deep integration with Facebook – just as the social network’s user growth started to chart skyward. Moreover, Causes founders Joe Green and Sean Parker had close ties with the early Facebook team, giving them a strong connection that any startup would envy.

Early advantage doesn’t sustain

But these things do not a successful startup make. Causes did accomplish some amazing numbers – over 170 million people have used Causes at some point, and they’ve raised over $40 million for charity. Those numbers are nothing to sneeze at. But where is Causes headed form here? Take a look at their monthly active users since September 2009, and the answer isn’t pretty:

A massive user base, impressive numbers, but users headed out the door. Remind you of anyone? How about Yahoo!? There’s more than one similarity that the two platforms share:

  • Identify crisis – like the purple web giant, Causes doesn’t seem to be sure of what it wants to be. Is it a site for non-profits to raise money? A platform for individuals to raise awareness? A better way to share your philanthropic activity with your friends? A campaign tool for corporations and non-profits to deliver messaging? It’s tried all of these things. It does some of them well, but none of them better than anyone else.
  • Scattered content strategy – Yahoo! was all over the board here, publishing content from its partners, producing material itself, and even allowing its users to generate and share content. Causes isn’t much different. Thoughtful, well-produced campaigns lie right alongside spammy calls to “Abolish the Band Nickelback”. And that material is mashed together with features that Causes develops itself, often with corporate messaging involved as well. The result is a confusing mix with highly diverging styles, purpose, and quality.
  • A “big but cheap” user base – nearly 300 million people are active users of Yahoo!’s services. That’s an asset nearly any web company would kill to have. But what are those users worth to Yahoo!? Are they actively engaging in (or even paying for) a product? Or are they just inactive names in a database? It’s not clear if is a long-term asset for Yahoo!, or just a number. With 170 million users of its own, but declining usage over the past couple years, Causes should question the value of its own user base.
  • Poor UI – do you remember what websites looked like ten years ago? No? Just go to yahoo.com and you’ll see. Causes.com’s UI suffered a different fate – not of being outdated, but of just being plain awkward. It felt like each part of the site was designed by a individuals working in nearly complete isolation from each other, only to come together at the last minute to make things consistent.
Is there light ahead?

Fortunately, Causes is midway through a makeover. The platform has some great things going for it, and it would be fantastic to see it take off again. How are they doing?

Good – The user experience is far more streamlined – each page now feels like it’s a part of the same app. And all of the site itself, (except for payment processing), is now hosted externally from Facebook. Earlier versions of Causes were just Facebook apps veiled as websites, and they gave you this uneasy feeling of not knowing where you were on the web. The new standalone site feels much more solid.

Caution – The whole issue about hosting/publishing/creating content still exists. Causes still needs some streamlining here. And since there are still about a dozen “causes” related to abolishing Nickelback, there hasn’t been done much about elevating the level of quality, either.

Warning – The site still suffers from an identity crisis. Until Causes can focus on doing one thing better than anyone else, I don’t believe users are going to stick around. Who is the site really made for, and for what purpose? I don’t feel like I can answer this question well, and that doesn’t bode well for any web product.

Causes will definitely be worth watching this year. This should’t be the last of its improvements. But there is no shortage of other cause-based startups who’d like to bite off a large chuck of its users for good. Stick around, there’s plenty more to come.

What do you think – will Causes turn into a the Yahoo! of philanthropy, or can it turn itself around?

A platform for social business

Me on a visit with one of our partners at Sojo Studios.
Standard

I wrote the post below this week for my friends at Design Impact, a wonderful non-profit in Cincinnati that uses design thinking to tackle poverty around the world. The original post can be found here.

———————-

“People don’t buy what you do, they buy why you do it,” says Simon Sinek, visionary thinker and speaker. In other words – being genuine matters. This isn’t true just for people; it also applies to businesses. And consumers are increasingly demanding that businesses to take “genuine to a whole new level – by actively creating positive social change in the world. But accomplishing that isn’t something corporations can do alone; they need strong non-profit partners who can help them turn good intentions into meaningful outcomes.

According to Havas Media, “nearly 85% of consumers worldwide expect companies to become actively involved in solving [global] issues.” Not only that, but 44% of consumers are willing to “punish” a company for acting socially irresponsibly. Furthermore, a separate study done by Cone Communications, with Duke University, found that “79% [of consumers] say they would be likely to switch from one brand to another, when price and quality are about equal, if the other brand is associated with a good cause.” It couldn’t be clearer: businesses can no longer get by with only making a good product. Instead, they have to be able to say, “Because our business exists, the world is a better place.”

Me on a visit with one of our partners at Sojo Studios.

While it’s a nice idea, how many corporations can actually make this claim?  Havas also notes that “only 28% of consumers worldwide think that companies today are working hard enough to solve our social and environmental challenges,” and that “20% trust companies when they communicate about their social/environmental commitments and initiatives.” Ouch.

Why such a discrepancy?  Sure, you can shop at Starbucks and support the fight against AIDS and malaria through The Global Fund. Whole Foods will support causes like the animal shelter when you use your own grocery bags. But these are one-offs, not the standard.

Would more be done if businesses were simply better educated on social issues? I don’t think so. Obviously, businesses don’t have much expertise on the subject. But they shouldn’t have to. Pursuing such knowledge wouldn’t allow them to focus on what they do best – building quality products. Instead, businesses should turn to the expertise that already exists, by partnering with proven non-profits that match their brand. By finding a non-profit whose mission is aligned with the values and attitudes of its customers, a forward-thinking business certainly take advantage of the consumer preferences that Cone noted. The non-profit would benefit, too, of course, though increased exposure and likely some meaningful financial support.

Work on the Erikoodu Briquette being conducted by Kaleidoscope.

Here’s a great example: Design Impact has partnered with Kaleidoscope, a product design-firm based in Cincinnati. The partnership is really meaningful, because it goes deeper than surface level. Sure, Kaleidoscope has provided Design Impact with resources such as office space, staff time, and even financial backing. But beyond that, the two organizations also share something more meaningful: they both use a design-oriented approach to come up with products, ideas, and processes that meet the needs of their customers. Kaleidoscope does so with consumer goods; Design Impact with eradicating poverty. Because the two organizations have so much in common, the partnership is one that all their stakeholders can get behind.

Partnerships like these are definitely steps in the right direction, and encouraging for any organization looking to pursue something similar. Unfortunately, though, such arrangements are still uncommon. Regulatory filings, legal contracts, paperwork, and generally not knowing where to start can keep plenty of organizations from ever moving forward. We learned this first-hand at Sojo Studios (my own place of employment), where we had to devote considerable resources to creating partnerships and navigating the associated regulatory landscape. Had non-profit partnerships not been critical to our business model, it’s unlikely that we would ever have found the time and resources to make them happen.

Sojo Studios website, featuring Wetopia.

Without a streamlined way for a for-profit and a non-profit to find each other, that statistic about 28% of companies not doing enough isn’t going to change much. What we really need is an “eHarmony” for cause marketing. Something open, flexible, transparent, and large-scale. This doesn’t exist yet, but there is no reason why it shouldn’t. With an obvious desire from consumers to see the companies they patronize “do good” in the world, and high barriers to entry for-profit/non-profit partnerships, the world is ripe for a better solution. Groupon built one for daily deals, Amazon and eBay did it with retail, and Kickstarter make it happen with crowdsourcing. Why not something for corporate social good? Keep your eyes peeled; something is bound to develop soon.

In the meantime, speak your mind about whether or not the businesses you patronize are doing enough to create positive change. And lastly, share your thoughts: are for-profit/non-profit partnership the best way for corporations to create social good? What needs to happen in order for them to more easily occur?