Bootstrapper.com - Confessions of Serial Entrepreneurs

So I was recently going back and forth with Guy Kawasaki about web 2.0 / Web 3.0. I had asked him to keynote the Web 3.0 Conference - that i’m producing. He responded that he still doesn’t get Web 2.0 and basically that terms are worthless. After some more emails, I remarked that most people need a moniker in order to understand an idea. Otherwise people don’t know how to understand things. The average person isn’t Guy Kawasaki, it’s Joe Schmo. In the end, he agreed with me but still turned down keynoting the event. So when thinking about and speaking about terms such as Web 2, Web 3 etc… remember a) terms are bullshit but b) terms are good to help quantify something so not such a bad thing

Back to the Future…

Hi Folks!  First lemme say thanks to Richie and the bootstapper team for setting this up and doing  a large part to bring together the early stage community in NYC. Now on to my first post!

I just got back from Miami for the Future of Web Apps conference and in addition to getting me away from the fantastic NY weather for a few days, I have to say the team at Carsonified did a great job of pulling together some really interesting and intelligent people from the Web community.  A number of different themes were touched on at the conference so lets take a minute to go over the main take-aways and my VC perspective for each:

1)      Build it now – if you’ve got a great idea for a web app and are thinking of building it, don’t wait.  This was a pretty common theme among presenters and it resonated well with much of the audience.  Advances in development tools are making it easier to build and deploy apps quicker every day.  Once you’re app is out there let everyone else figure out what its for.

VC Perspective:  Innovation and continuous improvement are what drives technology.  I like to see that there is a large and growing community around improving user experiences and usability of the web.  In some respects this is a model for a distributed R&D organization, using the web developer community to provide feedback and hone in on a real and valuable use case.  “build it and they will come” has been the mantra in the ether for some time and I worry that consumer behavior outside the tech savvy community dictates that consumers on a large scale like to be told what they need.  I still think this model can work but I think companies / developers need to get a handle on what they are trying to build earlier and more concretely than before.

2)      Don’t worry about the business model – ties in with the above point. This is the point that making money is a trivial concern and can be addressed once you have scale.

VC Perspective:  Ummm, not so much. Having a product with a clear commercial application / path to monetization always gets points in my book.  I know there are tons of examples of successful businesses to prove me wrong on this one, but without a clear strategy for a company, startups risk getting marginalized quickly and fall more into the feature rather than company category.

3)      APIs  are the jam – much love was touted for fostering of collaboration and openness enabled by APIs.  From both the startup side and independent developer side, APIs were viewed as an easy way to put feature development on steroids.  In fact, Leah Culver of Pownce stood up in front of the crowd and apologized for not making their API open enough initially and announced the availability of a newer more powerful one.

VC Perspective:  Great way to get people excited about your product, get inexpensive feature development and see what people are doing with your service.  Once again though, if you’re not careful, you could find yourself falling to the feature vs company problem all over again.

4)      Focus on the user base – there was no better speaker for this topic than Gary Vaynerchuck of WineLibraryTV.  In case you haven’t checked out the “Thunder Show” you are seriously missing out.  Gary’s point, echoed by others as well, was that listening to, be available to, and connecting with your audience is critically important to developing and maintaining a brand.  If not the founder, there should be at least one brand evangelist on the team who’s sole purpose is to connect to users, respond to every email personally and put a face with your service.

VC Perspective: Important to building a brand, definitely, but more applicable for some companies than others.  I don’t think Larry or Sergey’s faces would have made me use Google more, but the Kevin Rose example is applicable.  Mr. Rose carried a large fan base with him when he went from a host on Tech TV to starting Revision3 and digg.

5)      Continuous integration – Cal Henderson of Flickr really banged this point home. In not letting your feature development and staging stray too far from the actual production version of your app, you run fewer risks of launch failures and negative reactions to major overhauls for the user base.

VC Perspective: Totally makes sense to me. The methodology that keeps your team on a steady development trajectory as well as minimizes the risk of catastrophic events makes a site more reliable and user friendly.

All in all, it was a good conference, met some very cool people and heard about some interesting new technologies.  Although, as a VC, I feel obligated to say that even the world for web companies is changing, and startups need to be more conscious of where they fit into the economics of the internet going forward.  This is not just because of the leveling of the development field and the growing power of web apps, but because of the changing nature of the parties involved.  No longer is a large user base the key to monetization or exit.  I can go on and on about where that is going, but this post is already too long and I’ll save that for another time.

I’d love to hear your thoughts on the topics above so drop a comment. Also let me know if there’s a topic you’d like to hear me blabber on about, upcoming topics include, Microformats and Google as the OS for the web, Health 2.0, and the inevitable economics of creating a company.

My issue with web2.0 is this: Lots of good products by people that don’t know how to market them. Viral marketing is a misnomer. You need to SEED viral marketing. You usually need to BUY your first 50,000 users. Once in a while there is an exception but you need to market.

Myspace for example was seeded. They had 300 employees and they have a contest where the employee who got the most friends would win $1000. The average person got 30 friends = 10,000 users.

Then they did email blasts to millions of opt-in records, probably another 40,000 users

In total they seeded it with at least 50,000 users in less than a week. Then it took off.

So Mr. Web2 - what’s your seed marketing plan?

See you’re reading this….marketing works… learn it….

And don’t you love inuendo? it works…

The web2.0 strategy of if its good people will come to you is wrong. Every great idea needs seeding. Just ask Brad Greenspan founder of myspace, the first huge web 2 play. Myspace was seeded by 300 employees telling all of their friends and by sending out millions of emails promoting the site. Always market.

Even if you’re site is invite only market. Do negative pr - make people wish they could have an invite

If you don’t market you fail or you don’t succeed as much as you would if do market.

I don’t care what your investor says, marketing is more important that fucking whizbang product. Go ask Steve Jobs how the EXTREMELY defective nature of ipods hurt their sale?

My GF’s ipod EXPLODED in her ear…

Apple sells millions of them still…Apple has NEVER made a good/useful first generation product. Steve Jobs is just a marketing genius.

Now I’ve been a member of ASW for about a year and am one of the most active people on their forums. For those who don’t know ASW is an elite social network catering to the jetset. It’s a great site where you get to interact with artists, movie producers, hedgies and entrepreneurs. I’ve thrown events for people and ASW and gone to some great parties. I’ve made some good friends from it as well. However the site has serious flaws and every single active user of the site I know is very pissed off at them. Now, they may kick me off the site for this post but they need to hear it or the site will die or someone will listen to me and start a competitor…

1) Police. They police their forums and limit people to starting 3 threads a week. In a real community, moderation should be internal by its members via flagging (ala CL) and active smart members should be given moderator status (ala all the old webmaster forums). Instead they hire forum cops. I have had many threads deleted and almost kicked off the site. This one fact is enough to cause a mutiny. As an active member of the site i am routinely insulted when i should be the person they court.

2) Lack of real events section, sure you can post events and the events are great but there is no rsvp system and no way to do follow up on events. You target the jetset, why not offer event tools?

3) Shit Search. No tagging on the site and the search is the definition of poop in the dictionary

4) Horrible PM system. No search, no folders, no attachments, enough said.

5) They don’t do enough to encourage page views. I can go over this for about an hour. After all I am a marketer.

6) they started a magazine. they ripped off quintesentially and started a magazine. To me this is the sign of death. Worse off its not user generated but professionally written. There are published authors and big time magazine editors on ASW and they professionally publish. Give me a break. They also promote the magazine internally like a cheap hooker. It’s really sickening. Focus on your core competentecy - you’re community first, once you have a community that is working properly then be a publisher and if you are going to do that take advantage of your people.

Bottom line: Great idea, great community but ripe for failure because they do NOT listen to their community and are not community friendly. Still I spend time on it, too much time. What does that say?

Now if you’re like me, you talk to way too many people and way too many entrepreneurs. I mean its nice to know I’m not the only lonely and crazy sole that can’t sleep at night because he’s found Santa’s secret sauce (psst: Rudolph invented it and Hannukah Harry added in sugar).

However, one thing that isn’t fun is everyone thinking their venture is web 2.0. Now I would like to make a bold statement. WHO CARES!

I don’t care if your company is web 1, web 2 or web whatever, I just care about one simple thing, well actually two….1) Are you making money / can it make money & 2) Do you have enough traffic to sell it to Yahoo before they realize it’s a bag of flees?

If you’re creating a cool new web2ish website to take make it easier to show off your socks online, I really don’t care and I doubt most people really do so unless you are building a web business that actually can be a business, please stop using web2 because everytime I hear web2, my mind drifts towards a sock puppet. (Now, get your mind out of the gutter!) Pets.com, that defined the bubble, will your web 2 venture define the next bubble or should I just buy a pack of Bubble Yum?