This is a random observation while listening to some killer ambient music on a pair of good headphones:

We like to in hindsight attribute the success of disruptive products to practicality when in truth these products succeeded because they elicited some previously-impossible emotional experience in their user.

Here’s the crux of the epiphany: When I was eight I got one of the very first Sony Walkman’s (this is the closest pic I could find but I swear mine was even more old school). I had a bunch of teeth pulled right when this miraculous device debuted and my parents figured it would a good distraction to fill my head with music during the recovery period. This turned out to be a genius move on their part and worked really well. In spite of having awful pain from every corner of my mouth, this new incredible way to experience music trumped everything and transported me beyond the pain. Now here’s why this is relevant:

Clayton Christensen (and by proxy many others) have cited the Sony Walkman in their explanations of disruption usually saying something to this effect: “The Walkman achieved disruption because it enabled young people to listen to music out of earshot of their parents for the first time.” This is a functional/practical motivation (ie. listening privacy, facilitated quiet rebellion) and while it may partially account for its success, I would submit that there was a more fundamental emotional-based motivation: “it enabled for the first time the undeniably cool & irreproducible experience to have music originate from between one’s ears.” This is akin to experiencing dry ice, static electricity or pop rocks for the first time- it’s just freakin’ cool!

No doubt practical motivations overtake the cool factor at some point and most disruptive products with any longevity can’t subsist indefinitely on coolness alone. But in the vast majority of past product success analysis from today’s vantage point, the coolness factor gets way undervalued. The ubiquity of white earbuds now makes it difficult for us to imagine thirty years back to a time when experiencing music that originated between your ears instead of from external speakers was as untangible as anti-matter & black holes are to us today.

Anyways, there’s no call-to-action here other than to observe that our “coolness bar” is perpetually raised higher each year and it’s impossible to see those case study products via the same lens of wonderment we would have had at the time they presented. I don’t dispute Christensen’s ideas on disruption re: underserved markets, competing against non-consumption, etc. but I think we need as entrepreneurs to acknowledge the role of a more parsimonious “I just gotta have the music inside my head!” motivation in explaining the success of a product like the Walkman.

No doubt when Apple someday develops the ability to deliver any smell on demand via the appstore, we’ll all run out and purchase an iSniff because “I gotta have any smell on demand!” And years afterwards the business historians will all concoct elaborate theories about the runaway success of this product explaining how we were economically-motivated and seeking to reduce trips to flower stores.

Ok here’s a plea for any developer who knows how to write browser extensions to write one that lets me do basic spreadsheet operations right in the web page. I would pay $20 for this add-on in its most basic buggy incarnation and up to $50-75 for a pro edition depending on how well it worked. Here’s the issue:

It’s too cumbersome to ask simple questions and do basic data wrangling of tabular numbered data in web pages.

I play with data probably five times a day via various web sites (sometimes our own, sometimes ones in the wild). Here’s a practical example from right now- we’re running some email campaigns for one of our startups and I get this report:

Which is just a set of numbers and has no meaning until you can see relative %’s and how campaigns compare across iterations. I would like to be able to quickly calculate the open rate, CTR and bounce rates of each of these five campaigns. And then get average totaled across all mailings.

Now sometimes you luck out and can copy/paste the table into Excel or Numbers and do basic summing / averaging / math ops there. But it’s a crapshoot – half the time it pastes the entire table into a single column which makes it useless. You wind up w/ this:

(sorry if you haven’t seen this Spinal Tap scene that bread reference will make no sense at all).

Pasting to a desktop app makes you leave the browser and adds just enough friction to the process to where you might not ask a question of the data that you would have otherwise. Google Docs is getting us closer and their copy/paste tends to work better, but that too is still an extra step and cumbersome & flakey. The other alternative on small datasets like this is to Command-Space to open Spotlight and manually run some calculations there typing in the numbers. But alas that sucks as well.

What would be truly spectacular is a FF or Chrome extension that gave me this right in the context of the web page:

aaaand… boom:

Select. Click. Done. Two motions to get immediate insight into tabular data on web pages. Like I said, I’d pay $20 no question for the basic version and if you start adding spiffy extra spreadsheet functionality, that number goes up to $50 and beyond very quickly. This is a valuable/painful enough situation where it would be pretty easy to make me happy even with a crappy extension.

So my question is “would you pay for such an extension?” Heck, I’ll setup a Pledgebank and hire a programmer to create this if enough people want it. I think it could do miracles for startup founders in terms of wiping out the friction associated with casually asking questions of data in web pages. My hunch is some developer could give away the very most basic version and charge a grip for the professional edition similar to how iMacros has done it. Leave a comment or a tweetback if this is something you’d use.

I just got back from Microconf in Vegas and wanted to do a brain dump of some thoughts while they’e still fresh. This was an outstanding event in every way – killer speakers, high quality of attendee & flawless execution. I highly recommend (provided Rob and Mike decide to do this again next year) that any single founder or bootstrapped company attend.

Takeaways

This was a 2-day deal with some top-notch speakers. As is always the case with these types of events though the real value is in the hallway and meal conversations. I was fortunate to meet some super duper cool cats & dogs. As far as nuggets of actionable advice, I noted a couple from the various talks:

• Ramit showed the scientific approach he takes to understanding his customers’ problems and objections via increasingly specific surveys and systematic testing on the site. His testimonials are all surgically placed to address the objections he uncovers via testing. This wasn’t earth shattering but he hammered home the value of a methodical approach to unearthing your customers’ problems and thinking in those terms vs. selling the features of your product. I’m looking forward to implementing some of his ideas on how to conduct killer surveys.
• I finally got to meet Sean Ellis whom I’ve followed for about the last year and a half. I love his philosophy of mandating that you achieve a certain level of measurable product market fit before ramping marketing. Think of it almost like a type of “escape velocity” in that you don’t leave orbit and apply the rocket fuel until you’ve achieved this “must have” level of affinity from at least 40% of your user base. He dropped a nugget in passing that I thought was very insightful. He said “You can increase the gratification of your users without even changing the existing product simply by identifying what they perceive to be the core value and stripping all messaging down to that essence.”
• Hiten is my hero and is the lyrical gangsta of funnel analysis and conversion optimization. He dropped some pure gold with his presentation on the various lessons he’s had in building Crazy Egg, Kiss Insights and Kiss Metrics. For people already immersed in the Customer Development movement it wasn’t anything new but it was a great orientation for the folks who weren’t familiar with that framework. He pulled together a neat bundle of resources which I plan to go through soon. He also inspired me to re-implement Kiss Metrics and get a firm grasp on exactly where we’re losing people in the funnel. If you’re not following him and Kiss Metrics on Twitter you’re doing yourself a disservice as it’s the best curated fountain of useful techniques for young startups. One audience member during Hiten’s talk shared what I thought was an ingenious cheap/elegant hack for getting early CustDev feedback on an app: post an ad in the jobs section of Craig’s List for the industry role you’re targeting and solicit input either via a survey or a physical focus group.
• Noah blew our mind with hot sauce. If you weren’t there we’ll just have to leave it at that. But there was literally Sriracha flying.
• The website teardowns were one of my favorite parts. They picked apart the sites volunteered by attendees and walked through what could be improved. It was hugely interesting to hear their take on the flaws and the rationale for how/why/what to change.
• The Pluggio guy, BuySellAds guy, Rob Walling and Mike Taber all gave great presentations worth noting.

In all it was a superb event that I would highly recommend to anyone contemplating attending. The one format change I would propose is to break up the lineup of back-to-back speakers all day by interspersing some type of interactive exercise. The speakers are just the excuse to get the right people in the room but the truly valuable part is the interaction with other attendees. It would be neat to see them sub out one of the speaking slots with a problem solving exercise whereby people break into groups and work to cobble together a solution to a specific business challenge and then have an ambassador from each report back to the group at large. Anything you can do to increase the surface area for having conversations amongst attendees goes a long ways towards making the conference even more useful.

Lastly, I just wanted to share a moment I had after making the drive back from Vegas last night. I’m now living up in northern Arizona in a cabin for the summer (a whole ‘nother blog post). Anyways I went for a barefoot run on the golf course listening to this guy’s playlist and this beautiful song came on right as the sun was setting and I was running this path through an outcropping of trees. This experience happened one other time but it was an absolute wave of pure gratitude that washed over me and every cell in my body simultaneously acknowledged how lucky I am to meet all these incredible people who are laboring to change the world in their own small way. For all the doubts that swirl around when building a startup in an unproven market and an uncertain economy it’s moments like these that confirm we’re running the right path.

Huge props to Rob Walling and Mike Taber for toiling endlessly to pull this event together. I’ll be there next time no question.

I almost titled this post Mint.com: grow a pair already. If Patzer were still running things independently he’d probably be down for the bold play of disrupting the banking industry but sadly under conservative Intuit management I doubt we’ll see this play from them anytime soon.

Banking sucks. It has all but become entirely commoditized and yet I don’t know a single person who actually is satisfied with his/her bank. The features and rates are nearly identical along with the frustrations across providers. The model with banking seems to be: get you in as a customer & sign you up for extra services so switching is a PITA. Pleasing the customer? Umm no… Convenience charges, statement fees, courtesy tax, ding-you-for-withdrawing-your-own-money fees… yep, that’s the norm.

You will remain with a bank you hate because there’s always just enough inertia to keep you from changing. The more surface area you have via extra services, the harder it is to leave. And besides, if you do leave the same dynamics are still at play so it’s not like you have anywhere better to go.

Here are some obstacles that keep the average person from changing banks:

• the tedious process of applying for a new account and closing out the old one
• the idea having to relearn a new UI for your banking interface
• switching where your direct deposit goes
• reconfiguring your personal money management software
• reconfiguring auto ACH payments hanging off your account
• reconfiguring auto debits on your credit cards
• figuring out how to send and accept wires under the new system
• learning new ATM habits and locations
• recreating bill pay profiles

There are probably a bunch more but those are the main friction points that immediately come to mind. The banking scene is ripe for a startup to come along and disrupt it by taking these issues off the table and making it easy to switch. Of everyone that exists today Mint.com is in the best position of anyone to pull it off (but they also have the most bridges to burn and are no longer the rogue player to attempt daring feats). Here’s what a theoretical startup we’ll call AnyBank should do:

a) Abstract the major banking functions for the top 10 banks to a generic UI you work with
b) Store your info and automate the process of switching banks so it’s trivial to change.

This is a bold proposition. Banks, like any incumbent spoiled with the luxury of traditional lock-in aspects, will fight this initially because you’re killing the barrier to leaving. But the answer is: start with the smaller progressive banks who are willing to play ball to gain the new marketshare, grow a critical mass there and then move upstack and gradually sign up larger and larger players. Give me the Mint interface only instead of being limited to reporting functions, add the actionable banking functions into the UI and so I have a central banking app that works consistently agnostic of the underlying provider. This will force banks to compete for our business, re-introduce the concept of customer service and make them think twice next time instead of f&^%’ing us at every opportunity.

I think of banks as being almost like databases- I have no emotional attachment and could care less which one I use as long as it performs well. There are factors that make it advantageous to use a specific one given circumstances, but if a startup can move all the “logic” up to the application layer ala AnyBank.com, then the db can be swapped out at will and I’ll do so when it makes sense.

Mint if you’re listening: please grow a pair and go disrupt the banking industry. I already spend more time in your UI than all my banks combined. If you give me the ability to execute my banking tasks from your interface I’ll have zero reason to ever visit my bank’s site. Go the extra mile of making it trivial to switch and you will single-handedly coerce an entire industry to behave properly again.

I went paintballing with a group of 11 guys this past weekend in the desert north of Phoenix. It was the third time I had ever been and we all had a blast. It was surprising how many people were up there – probably close to 100 when I was expecting about 10… Anyways, while the experience was killer, there’s a simple tweak they could make to take it to the next level.

This particular operation (or any other savvy paintballing outfit) should add a premium feature to their game play. They should learn from skydiving and offer helmet cams and then sell the footage back to the players. I don’t know what the exact economics would need to be but quick googling shows there are sub-$100 waterproof cameras that could easily be mounted on the players masks. Take it a step further and put a close-circuit TV in the deadman box (place where people accumulate after getting shot) , have the helmet cams transmit wirelessly in real-time and broadcast gameplay live from multiple angles. Affix helmet cams on all referees and make it truly cinematic with the ability to see the final firefight showdown after you’ve been shot.

Once you’re knocked out it’s still fun to come back and debrief with other folks in that area but you know you’re missing a crazy final battle that’s happening out of sight. It would incredibly badass for them to add this real-time window into that action without too much cost or extra effort required. The other benefit is that they’s then capture all that footage to a hard drive daily and have the ability to burn you a DVD at the end for $20 ($50?, $100?).

This paintball place doesn’t need more players – it needs a way of extracting more money from their existing player base and making the game more memorable to drive repeat business.

There is an absolute opportunity here to offer something extra that makes the experience more engaging while simultaneously giving the paintball company a high-margin new product to sell for essentially no cost. And the byproduct is footage they can not only sell on-site, impulse-purchase to the players but also to build up a knowledgebase or have fodder for educational DVD’s, to acquire highlight reel film for their promo collateral or best yet: post it to FB on players’ behalf and offload all their marketing costs to them. All of that drives more repeat business and higher-margin business. We used Groupons for this outing but if this place builds up their organic crowd they can cease the Groupons and keep the full price for themselves…

Anyways below is some point-of-view footage I took from my iPhone on one of the rounds we played if you want a flavor of what it’s like. In 3min I managed to run into a cactus, jam my gun, cap some guy in the head and then take a barrage of cross-fire myself. Good times.

The title is a reference to the final scene of one of the radest 80′s movies ever: “Back to the Future.” I remember walking out of that theater as a kid hopped up on red vines, Huey Lewis, the prospect of time travel, and all the possibility that a flying delorean represented. It seemed like anything was possible.

I have a similar optimism today with this swirling curling storm of a revolution that’s promising to change how products will be test marketed, built and delivered. I predict this fundamental change is going to do for product development and business model generation what test-driven development did for software dev. And it’s pretty freakin’ exciting to be swimming in this stew of startup activity while this storm is developing. To explain the essence of this mentality let me first tell a story that will reveal a double entendre in this post’s title:

I don’t have the original source on this anecdote but supposedly at a California college (Cal Poly?) they were redesigning the campus and trying to figure out where to build the new sidewalks. It was a complex arrangement of buildings and there were a bunch of conflicting opinions about where the sidewalks belonged. Someone had the ingenious idea that rather than speculating, they should instead run an experiment and let the market speak. So they planted grass the first year and waited. At the end of the year they took an aerial photo and the tread-worn ground became the blueprint for the optimal sidewalk routes as chosen perfectly and implicitly by the student body.

So what does this have to do with startups?

I believe we’re on the cusp of seeing some major changes in how products are brought to market. If you follow the Lean Startup, Four Steps to the Epiphany, Customer Development movements then you have the core philosophy already. But what’s interesting is the emergence of tools that allow you to apply these concepts very rapidly on a large and targeted scale via online experiments. We in the tech industry no longer have to build and tear up sidewalks – we can just plant grass first. Rather than explain the techniques for “virtual grass planting,” I figure it will be easier to simply publish the data and methods for experiments I’m conducting now with a local Phoenix startup that I advise. Here’s the gist of it though:

You can think of this mentality like test-driven development for business.

Test-driven development (TDD) is a methodology for creating software where you seemingly put the cart before the horse and write the tests up front. You then go back and do the necessary coding to satisfy the tests. Once the code meets the test, then (and only then) do you go back and fine-tune, refactor and optimize things. Having been a confessed “cowboy coder” back in the day this style of development sounded completely absurd until I saw it in practice at the San Diego Java User Group. Writing the tests first forces you to think differently by getting consensus on the destination and then worrying about the implementation details of how you get there after the fact. In the same way it’s now possible with all these tools to front-load much of the learning about product-market fit, price elasticity & messaging before you ever actually do an ounce of engineering. It’s all about systematically removing uncertainty and converting unknowns to knowns before charging ahead with the concrete.

Anyways, I don’t mean to leave anyone with startup blue balls but we’re not quite ready at this point to open source our experiments. This is an exciting time to be in this space though. To get a good flavor for this type of thinking check out Kent Beck’s talk from the Startup Lessons Learned conference on the logical extension of Agile development to business. And if you’re new here sub the RSS of this feed or this Twitter account to follow along on how we’re validating and iterating at 88mph and 1.21 gigawatts.

Here’s a simple proposal: if you’re calling yourself an Angel Investor at an event, you should wear a standard name tag that gives an objective measure of some basic facts about your “nutritional content” as an Angel.

At least in AZ, the term “Angel” seems to have been co-opted by anyone who has ever bought a piece of real estate. After holding a piece of dirt and making money, these people are somehow magically imbued with divine powers to forsee why your technology startup won’t possibly work (and they’re happy to prognosticate about it).

I was at an event last night helping a friend pitch his company and one of the panelists (who shall remain unnamed) made the repeated feedback to the presenters that “you didn’t specify what my return will be.” Sir, frankly if that’s the only feedback you have for these entrepreneurs pitching their early-stage, pre-revenue technology startups, you do not deserve the title Angel. Go buy a treasury bond and the bankers will happily explain what your return will be.

At this stage in the search for the repeatable scalable business model, companies have no f’ing clue what the return on your $50k is going to be. And it’s a silly tapdance you put them through when you force them to fabricate and justify one. The idea is to make it as big as possible – we all agree on that right?

If you’re a VC adding fuel to a finely tuned business model where the formula has been determined and tested, by all means ask the entrepreneur to calculate and substantiate what the return will be. At that point that exercise makes sense. But at this pre-revenue stage by asking this question you’ve self-identified yourself as being unsophisticated, focused on the wrong motivation of Angel-stage investing and frankly you’re not someone whose money I would want at that point. At the Angel stage the entrepreneur has demonstrated the ability to create a product which appears viable. You’re funding their search for the repeatable scalable business model, not putting gas in the engine of a working model. Think of it as a more interesting/rewarding alternative to throwing your $50k down on a craps table in Vegas. If you’re treating it like a blue chip stock and can’t afford to lose that money you shouldn’t be doing Angel investing.

Note: I’m not proposing regulation on Angel Investing, I’m proposing a standard for Angels self-reporting some basic traits to the folks who are pitching you. This objective label would do two important things: 1) for the budding entrepreneur, it gives him/her the ability to assign a level of credence to the words coming from the person telling them why they’re going to fail. 2) for the Angel, it forces them to admit publicly how many deals he/she actual does at the end of the day. The guy with the “Deals last year = 0″ label on his breast pocket will likely think twice next time before he publicly craps on a guy starting a company for the first time.

This is half rant / half proposal for a free business idea. I’ve gotten four emails in the past week from various entities (2 banks, 1 health insurance provider and 1 telephony carrier) that notify me of changes to their TOS (apparently I need to accept them if I want to continue being a customer). One of the documents was a 35pg PDF which presumably had a few sentences change since I first accepted it. Given how much we have going on in our company the effort involved in combing through that document vs. the likelihood of that task returning value all but condemns it to reside indefinitely at the bottom of my todo list.

A better way & an open letter to service providers

These verbiage haystacks are bad news. Your customers are busy people and while it may be in your best interest to cloak the tweaks to your policies that may stir up unrest amongst your customers, this practice is asinine. Publish the damn “patch” to the TOS so we can skim it, see the crux of what changed and rapidly make a decision about whether we agree the tradeoff is worth it to remain your customer.

Yes, your attrition rate will go up as a result (and it should) But the thinking that “we’ll just bury the new stuff in the huge doc and people will accept it out of frustration/lack of time” is hugely short-sighted. We already know 88% of the people don’t read the TOS the first time, you think that % is going to be any better when you ask them to re-read a slightly-modified version a few months from now? While you may get a short term attrition benefit w/ the current method you’ll eventually end up with angry rants from pissed off customers higher support costs from fielding inquiries caused by inaccurate expectations. By doing it the way you are now you set the stage for an inevitable exodus of angry customers to your closest competitor that respects the value of their customers’ time. And the loyalty they earn by making it easier to stay informed and make faster decisions is priceless – you will not see the people that defect specifically for this reason again. And they will be vocal about their exit.

Abstracting this to a business idea

So the meta from this is that there’s an opportunity for someone to deliver “Policy as a service” to companies. Us geeks can figure out how to put docs in source control or publish pages that automatically highlight the diff from the last version. But for the rest of the world the path of least resistance to writing/reading is creating a new PDF and expecting readers to comb through the whole doc.

Someone should develop a simple service that allows companies to publish policy docs (TOS, privacy, employee handbooks, EULA’s and such) and give their end users a way to easily see what’s changed before accepting it and track the history of acceptance. The stage is primed for a service like this to work and it’s something that would allow it’s creator to “do well by doing good.” It would drive better transparency in business practices, support consumer rights and promote better corporate responsibility.

If you build this and make a million, buy me a donut and follow me on Twitter.

My friend Josh suggested I submit this idea to Sunlight Labs to build. That seems like a noble effort they’ve got going but I figured it might be more interesting to instead do a blog post and cast it into the wild. So here’s a free business idea for someone who needs something to build:

Give me an easy way to compare what people said they would do with what they actually did.

Hindsight is 20/20 right? The first place to incubate this app is using government. Leverage the data.gov “open government” initiatives that aim to create more transparency through exposing raw data via API’s and offer a service that counters a real problem.

Problem description: Legislative officials get elected based on specific promises and then renege and vote the opposite way. They bury the issue, voters forget, they get re-elected indefinitely and the cycle continues endlessly.

Start with this very focused use case around this problem and build an app that lets me see the track record of how Senators and Congressmen voted vs. how they committed they would vote.

Question: How do you monetize this?
Answer: Build it as a platform with the logic abstracted but with the first iteration focused specifically on this government scenario. That’s your freebie giveaway. Make this available and free as a public service and have it serve as a marketing tool for the underlying platform which you’ll then sell to companies who want the same accountability/hindsight for their own internal decisions. This works for any scenario where there’s a record of expressed intent for a decision followed by the actual decision. Follow the lead of companies like Spigit and Inkling Markets who hosted public “fantasy league” prediction markets to create awareness and drive sales of their underlying platform.

All the data necessary to get this going exists publicly. You’ll have to get an intern to aggregate the unstructured historical info that’s scattered via newspaper articles and such on how politicians proclaimed they’d vote, but going forward much of this data should be available in structured format via the data.gov effort.

So my question at this point: “Is there anything remotely like this that already exists?” Sunlight Labs or Startup Weekend- what say ye? Could you guys knock out something along these lines? The domain is available.

Big thanks to Francine Hardaway, Phil Blackerby and Ed Nusbaum for inviting me to speak with their class on monday and share what we’ve learned on product development in our experience in building JumpBox. Fastrac is a great program sponsored by the Kauffman Foundation. I went through 2 semesters of this course a few years ago and it’s an honor to be invited back as a presenter. Note: realistically Kimbro is the visionary behind our product and he should be the one to give this talk, but I did my best to distill the 10 lessons I’ve gleaned around product dev while riding shotgun in building our our company/product offering. Here are the slides (feel free to share, embed, email, whatever):

We played the “product box” innovation game and had two teams invent and sell a new type of lawn mower in 10min. This is a great exercise to grok the difference between features, advantages & benefits. Here are the product boxes they came up with:

We had a little friendly “industrial espionage” given the proximity of the teams ;-) but good times. If you’re starting a company I definitely recommend looking for the fasttrac course in your area. It’s inexpensive and “gets you out of the building” and talking with other people who are in the same boat.

Oh and I try to share helpful info and links for entrepreneurs and software startups. If you use Twitter follow me for those tidbits.