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Unless you've been living in a cave, you've probably heard that WhatsApp was purchased by Facebook for $16 billion in cash plus $3 billion in RSUs.
But what you may not know is that originally, WhatsApp was not solving a problem that people had. In fact, originally, WhatsApp was completely ignored.
It's a great lesson for startups: WhatsApp kept at it and iterated from zero traction, to the fastest growing messaging platform of all time (in fact, some might say the fastest growing platform as calculated by monthly active users of all time). Here's what that growth looks like:
But the original concept for WhatsApp was more of a status update app. This Forbes article articulates it well:
Based on your recommendation of First Round's "Review" blog, I've been reading all the posts. AWESOME one today on how Pandora managed an engineering resource crunch to get to where they are today!
“This is incredible, because someone very smart at one point thought, ‘We would be absolutely stupid not to do this thing.’ But really, when viewed in context of all the opportunities for the business, half of the things people thought were important immediately fall away," says Conrad.
I've been blogging about mobile for six years. Including things like whether native would beat HTML5, why Facebook switched back to native from HTML5, Native vs. Web, the rise of apps, the evolving definition of ‘app’, how Fortune 1000 CEOs are going to be fired for missing the Mobile Crush, how apps have a strong distribution channel, about NPR, Nat Geo, USA Today, Washington Post & others talking about mobile strategy back in 2010, how mobile is way more than a 2nd screen, how mobile data connections will replace wifi, the future of media on mobile, the mobile engagement challenge that nobody's talking about (yet) and how there are two types of engagement to optimize for, the basics of mobile, the future of mobile advertising, mobile events like WWDC 2010, a 45 min screencast back in 2010 with some big thinking about small phones, how mobile influences social strategies, what the iPad means for media, Sprint vs. AT&T speed comparison (spoiler alert: AT&T wins by a landslide), using mobile to lifehack a check deposit from 2000 miles away, mini apps, how mobile enables the interest graph, why we founded + sold AppMakr and Socialize (and the infrastructure required to run it), Android’s growth, SDK adoption tips (and tricks), as well as what mobile might look like in the future, including a review on Google Glass, hacking Glass, Tile, the Internet of Things, and what APIs mean for mobile. So needless to say, I’m deep into mobile.
But what I just read in the First Round Review (I talk more about FRR here) just blew my mind. They write:
Bam. Mind blown. Just like that. Native wins. At least for now.
Up until the 1980's we basically all lived in an analog world. Record players, cassette decks, cars, telephones, cameras -- these were all analog. The only digital interaction most of us had was with clunky big-box computers that started appearing in some homes.
Then, by the late 1990's, many of us had started to dip our toes into the digital world, with CDs, digital cameras, cellphones, GPS units, laptops and of course, the early Internet.
But even today, we still lead largely analog lives, and the digital universe is an interloper within it. I call our generation the "digital tweener" period. And especially if you're 30 or older, the idea of the world moving to become more deeply digital isn't an especially comfortable feeling. Not only that, but it can be hard to imagine why we would want it to be more digital. Well, here are just a few examples of some of the data that's generally not being captured in your life today, but could be -- and at some point likely will be:
Some VCs write great blogs. A few that come to mind are Fred Wilson, Chris Dixon and especially, Ben Horowitz. But I'm usually not impressed with the quality of blogging that VCs do as a firm, which is too bad since VCs expend lots of energy courting top entrepreneurs.
First Round has cracked this code with their "Review" series of articles -- well, publication, really --, and has become the best VC-produced content for entrepreneurs I've found. Their content is exactly what both novice and seasoned entrepreneurs often need guidance on, including topics like:
What's interesting is that this isn't even their blog, which is located here and is much more of a traditional not-as-interesting VC blog. First Round has created a separate publication called the First Round Review, with longer form, way better produced content. Think of it as a "VC as a Publisher" model. And it really works. Very impressive, and it's something other companies -- including startups -- can consider doing for their target audiences if they're willing to make the investment required to produce high quality, targeted content.
I went to get my car washed today in freezing weather, the day of a massive snow storm about to hit DC. Needless to say, nobody else was there. (Why did I do this? Because the car desperately needed to be waxed + interior cleaned, and I'm not in DC for long). The experience got me thinking about dynamic pricing and customer loyalty.
Businesses typically try to use frequent-purchase tactics to drive loyalty, like a "buy 9 get 1 free" card or, in the case of airlines, frequent flyer miles. But I believe there's a better way to drive deep loyalty while at the same time maximizing the revenue a business gets: Dynamic pricing, with a Hedge. Here's what I mean:
As I mention in the video above, to say it was a slow day at the car wash facility would be putting it nicely -- I must've been one of only a couple dozen customers they would have the entire day. It's expensive to keep a carwash open on a day like today, including paying at least 10 employees to sit around and do nothing.
I ran across a fantastic PDF on HackerNews by Henrik Kniberg that pulls back the covers on How Spotify Builds Products. It's such a good article -- and so different how many companies actually execute on building products -- that I wanted to highlight a few of the best parts.
Firstly, Spotify starts with a a strong, concise vision (with a singular focus): "Spotify’s vision is to bring you the right music for every moment." This has proven to be a fantastic guide as they iterate on their platform. In a similar way to Dropbox, which I described recently, everything Spotify does furthers that singular vision -- every new feature, every performance enhancement. "Starting as a music player a few years ago, their products are now evolving into a ubiquitous platform for discovering new music and connecting artists with their fans directly." This allows Spotify to expend all its energy on optimizing for product/market fit around that vision, and that's what creates tremendous shareholder value in product companies.
The article sets up, in simple terms, the product prioritization dilemma that trips many companies:
"Here’s the paradox though: Successful companies like Spotify only want to deliver products that people love. But they don’t know if people love it until they’ve delivered it. So how do they do it?"
Coin is a new startup that's trying to replace traditional credit cards. Its YouTube video has 6.8MM views. When you Google the word "coin" they show up as the #1 search result -- not only that, but news story results fill out much of the first page of search results. Not bad for a startup with a product that won't even be available for another 6+ months.
What did this startup do to have such massively successful launch? And why is it coming from a small startup vs. an established company in the space?
In the world of product launches, many companies rely on Paid Media (i.e., ads) to launch new products. But startups don't have the huge ad budgets that big companies do, so they have to get creative by leveraging Earned Media (i.e., you, on Facebook, talking about it). Just like Lockitron did last year, Coin has touched a nerve, hitting its $50,000 crowdfunding campaign goal in under an hour, according to this Forbes article. The founder was quoted as saying:
Here's a great post by Skellie that dissects Elon Musk's approach to disruptive innovation, which is based on reasoning from first principles.
I had an MBA group come in to visit ShareThis yesterday, and we were talking about how to create really disruptive innovation. I realized today when I saw this post that reasoning from first principles puts into words what I've gutturally felt to be true: That really disruptive innovation happens when looking at a problem from a completely new angle.
Skellie quotes Musk as saying:
The nice thing about Musk's approach is that it provides a framework with which to do this. Breaking a problem down to its core components and then building back up from there with a fresh perspective often helps us arrive at very different conclusions than established approaches.
Great to meet the Berkeley Haas crew today; thanks for stopping by the ShareThis office! Also, thank you to Jacqueline and Janice in our office for getting everything set up, including your schwag!
Here is the video from our talk:
And here are my notes from the talk today, as promised: