Archive | startups

Validating geodatamarket.net

Today I livestreamed the process of validating geodatamarket.net. This focus was chosen based on a quick twitter poll with 5 votes. It’s not a lot of data to go on but yet still felt like pretty clear feedback.

I set up google and facebook ads for $5/day, set up email capture on the site and also wrote a reddit post.

Why are we doing this? To test the idea as quickly and cheaply as possible. If it doesn’t resonate with anyone, then drop the idea and shut the site down and move on to the next idea.

So far I’ve spent $11 on a domain, and in the end probably about $20 on advertising, for a total of $31. Time-wise I spent 2.5 hours yesterday building the site and 1 hour today doing some marketing. In a day or two, I’ll look at the ad statistics and review the reddit responses, if any. This will mean a total of about 4.5 hours of work.

It’s very arguable that I didn’t need to build the website or buy the domain and thus cut the investment down to $20 and 2 hours. So very roughly that would cut the cost in half. Next time!

Here’s the live stream:

 

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Building a GeoDataMarket

Imagine you want to buy GIS data. Where would you go? There are lots of free or free-ish catalogs, maybe it would be nice if there was a place to share data that had been made ready for various uses. I ran a quick twitter survey on what to live stream and a whopping two people voted, the first of which was to work on geo data market ideas. Therefore, I live streamed on twitch the creation of a geo data marketplace which now lives at geodatamarket.net.

It took about two hours and is backed by WordPress, woo commerce and a marketplace plugin.

There’s a single product available so far, it’s natural earth raster geoTIFFs cut out by country (250 files) with transparent backgrounds. Anybody could make this data with some work or, just go download it. People like you can log in and create their own downloadable map data products and sell them, or just set them to free.

The livestream videos are broken because my microphone broke, but here they are anyway:

 

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The algorithm and the failing kickstarter

I launched a kickstarter yesterday and it’s not doing well.

Here’s my basic algorithm:

  1. Try random things at zero cost
  2. Find the ones that work
  3. Scale those

We really can’t predict what will work or not which is why speed is so important – the more things you try the better since you’ll hopefully find something that will work. Boyd talks about this in his OODA loop. You observe your situation, orient yourself, decide what to do and then act upon it. Then go back to the start. He posits that if you can do this quicker than your opponent then you’ll win.

So let’s observe the situation.  This kickstarter raised about $600 in day one, with a fairly huge amount of publicity amongst map people.

Let’s orient given prior knowledge. The last two kickstarters did $1,600 in day one. They raised just under $15k and $10k total. It’s not super likely this one will reach $5k given the curve and what little we’ve had today (day two).

So it’s decision and action time. I’m pretty sure that:

  1. The prices on the kickstarter are too high
  2. The print images aren’t compelling enough

The prices are easy to drop and simplify. I’m thinking of just having one print at $40 or so since that’s the median price for this kickstarter and the last poster one.

As for the images, I’m working on continent-wide instead of city images. I’ve fixed some of the drawing issues. The thickness of the lines drops as log10() and I’ve changed that to log() which is nicer. I’m also working on aliasing and changing the color from “just black” amongst other things. Here’s an image of all the roads going to london:

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There’s a bunch of work to be done here, but it gets the point across. My guess is that continent images like this will be more compelling.

The interesting question is how to get feedback. Asking the existing backers makes partial sense since they committed money but on the other hand, we need to figure out why people who didn’t back it didn’t back it. Feedback welcome of course.

Part of the reason for this whole thing is that the printer I bought for the last project is dead and needs to be replaced. This isn’t compelling in and of itself. Remember the “try random things” part of the algorithm? Well in a sense, yes, random things need to be tried since we can’t predict very well the chance of success. But, there are a couple of things to consider.

If we have two ideas A and B we may as well go for the bigger one. The reason for that is that it has more ways to succeed. A bigger idea may contain some element of a successful idea. A smaller idea has a lower chance of success and a lower overall level of dollars to attract. The cost remains the same: zero. This is because that’s what I’m going to spend since zero means the maximum number of ideas to be tried. Anything above zero restricts the number of ideas.

Second is opportunity cost. Picking the smaller idea costs the potential gain of a bigger idea. Doing a $5k kickstarter is the same as doing a $50k kickstarter with a 10% chance of success. But the $50k idea has a higher potential payoff and the same cost (zero) with a higher number of sub ideas that might spark some following.

There’s also just less competition. Doing anything commercial with OSM right now is hard because there are irrationally funded startups doing everything for free and owning the whole space. Competing with free is hard. At the other end of the spectrum I really love Thing Explainer simply because out of the billion books published this past year, it’s so unique. It’s not another tween vampire romance. Doing unique and big things is the way to go.

Is the cost really zero to do a kickstarter? No. It costs my time and so on, but it’s about as low as you can go.

Back to failure. The typical valley thing is to embrace and love failure. But that’s really just a way of avoiding it the same as treating failure as bad. The secret is to know failure sucks and push through it as a process, not to pretend it’s good or bad. It just is.

I tested a bunch of ideas last year and most of them failed. Nobody remembers any of them. Anyone remember Fake Mayor? That wasn’t even a failure, that sold for actual money. Anyway. I have a bunch of data on the ideas that succeeded and really I should have done one of those as my next kickstarter, or one of the other really big ideas I have laying around. Next time. (And, next time might mean next week at this rate).

(As an aside, I want to do a book about how to test and build ideas for super cheap using the internet, I think it’d be interesting).

So. The plan is to either pivot this kickstarter, kill it or restart it with simplified rewards in the next 24 or 48 hours. What do you think?

(It should be noted that some semi-pivoting by putting the above image on the kickstarter and so on is simple and free so I’ll do that in any case, but it’s not really a full pivot).

License Ascent

Copyright when first envisaged granted a limited-term monopoly on a work which then later fell in to the public domain, or PD. This would give the author some amount of time to make money and pay the mortgage, balanced with allowing people later on to take the work and build upon it. So you write a book, you can sell it but nobody else can, and then some number of years later everybody can do as they please with your book.

This is no longer the case. Copyright is effectively infinite. This means that while we can take old works and build upon them (Pinocchio) we cannot do the same with even pretty old works (Mickey Mouse). Edge cases exist of course, for example you can in many places use old works for parody.

Some people wish to make their work available under less restrictive terms than owning it forever. For them, there are a set of licenses which they can use to release their works.

  • They can claim attribution. Broadly, this means you can use my work but you have to say where it came from.
  • They can claim share-alike. Broadly, this means you can use my work, but any derivative works need to also be sharable. So you can’t take my book and then rewrite portions and claim it for yourself.
  • They can claim commercial rights. Essentially this means you can use my work for anything but profit.
  • You can use some combination of the above.

Thus instead of claiming copyright forever for your new book, photograph or software, you could instead for example say “use it however you wish but all changes must be shared-alike and you can’t use it commercially”. This allows individuals and companies to put works out there and allow them to spread more easily than if they retained all the copyrights.

Two basic methods of making money have emerged while using these open licenses:

  1. The intellectual piece is free, but any physical product costs money. For example, 3D Robotics software for drones is freely downloadable and you can change it. But if you want a physical, flying drone then that costs money. Very similar is this: the basic software is free but some critical piece required for some use case requires payment.
  2. The work is available publicly under a difficult open license, but privately under some commercial agreement. This is known as dual licensing. The downside is that to encourage commercial usage, the open license tends to be as painful as possible. This way, a student at home is unaffected but a company might find a license difficult. Perhaps it requires a legal review, or places burdens on the company like open sourcing everything they do. To avoid this pain, they pay for the commercial license.

The trouble here is we still don’t have things leaking in to the public domain over time. It’s seen that once a work is licensed under some license that it’s stuck there until the end of man.Capture

What if we changed that?

I propose we engage in some kind of license ascent over time. Perhaps descent would be better. Under this scheme, some work starts out under a restrictive and painful license and over time makes it’s way in to the public domain. For example:

  1. I write a book. For the first year, it is available under a attribution, share-alike non-commercial license.
  2. After the first year, it is available attribution, non-commercial.
  3. After the second year, it is available under attribution.
  4. After the third year, it is available public-domain.

We are reintroducing the concept of the work leaking in to the public domain gradually. So when I first create some piece of work I own it outright and then over time it becomes less and less burdened.

For static works like a book, the timelines may be longer. Say, two or five years per step. For works which changed all the time, like datasets about the world, perhaps each step lasts a year. Why would we want to do this? Two reasons: Because otherwise it’s really hard to make money from open source, and otherwise open projects don’t benefit the public domain.

There are classes of works which require “giving back” like OpenStreetMap in order to attract people to contribute. That is, why would you contribute to OSM if you couldn’t access the data? OSM has now existed for 11 years and the state of mapping in the public domain is still essentially the same as it was 11 years ago. But what if OSM data dropped in to a more liberal license, or the public domain, over time? Perhaps we could have a PD version of OSM but it was 5 years old. It wouldn’t compete with OSM itself, but it would enrich what people could build on without restrictions.

Put another way, do we want OSM to be perfect in another 10 years and the public domain still be essentially unusable? Wouldn’t it be nice to improve both OSM and (for free!) the public domain maps available?

Now imagine you have some new project which requires crowdsourcing to succeed. Dual licensing has the downside that picking the open license has many difficulties. You want to pick something that encourages people to contribute yet allows you to retain space to sell things, and this isn’t easy. If instead you practiced license ascent then everybody gets the data at some point in the future. Perhaps if you are a PD person you wait 3 years, and a share-alike person you have to wait two years. But either way, it’s better than never getting the data under a license that you would consider useful.

And, it does this whilst allowing the project or company to make money off the freshest data. It also creates an incentive to make the data fresher, all the time, because otherwise the old data will be good enough for people.

Now you could argue that any project should be open from the start, but open projects tend to have significant downsides. Open projects are terrible at user interaction and experience. They’re terrible at design. They tend to be incoherent. But they are great at innovation and collecting data. At the other end, private companies which collect data tend to be great at design and so on, but terrible at innovation and collecting data because they don’t have volunteers. I posit that license ascent is a way to achieve both and that it’s better than just picking a license or selling widgets on the side.

 

Open Company

Here’s a crazy idea: It would be interesting to build a kind of “open” company.

Most companies are closed in the sense that you have limited contact with them and little insight in to their internals. It would be interesting to create something where there was some high degree of openness both within and without, a flat structure and deep feedback loops.

Valve doesn’t have managers (flat structure) and people just work on whatever they want to, with peer pressures as a check. Amazon has a lot of the same customer and feedback goals but more traditional management. A blend of these would be interesting.

The problem is capital. Valve has a big office in Bellevue and people. Amazon have bigger offices in Seattle and lots more people.

But what if we flip that? 37signals has some large number of remote employees and that appears to work just as well. Why not make all your employees remote? No more office-related costs.

People are, generally, expensive. Well, they are in Bellevue, WA. What if we don’t mind if you work in Timbuktu? What if they don’t work full-time? Suddenly employee costs drop off a cliff. For not much cash, you could hire 5 or 10 people on upwork to get started.

It’s never been cheaper to go do this. We could make the company handbook v 1.0 just be Valve’s handbook.

Amazon started with books, Valve with Half-Life. What if you start with nothing at all but people interested in the experiment, and employees own ideas of what to work on?

Could you make the company an entertainment in itself? People love following along kickstarter projects and watching Dragons Den / Shark Tank. People are already therefore paying dollars and time to be part of the experience in creating something.

An Open Company could put you right there with the people making things happen. You can follow along and influence who gets hired and what people work on. It would be like The Sims, only more entertaining because it’s real. You could help choose the company logo, be an “associate CEO”, vote on product wireframes… or not be involved at all and just watch (in your “OpenCompany” t-shirt).

Worst case, it would be an entertaining art project. Best case, it would be fun and create something of value.

Sound fun? Sign up for more at 0pen.company or here:


Auth0 and the new pay to play

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I’m pleased to announce I’m on the advisory board of Auth0, a company making authentication trivial. I’m going to get to Auth0 specifically in a minute but let’s talk about how companies place bets.

VC firms, book publishers and movie studios all do approximately the same thing but with different media in different cities. VCs try to find tech companies, publishers find books and movie studios try to find blockbuster movies. Silicon Valley, New York and LA. The problem is, we don’t yet know how to predict the future. Therefore they try to come up with nice stories about how something will succeed or fail and put money in to the things that they think will succeed. Of course, they’re largely wrong on those bets.

Luckily the rewards for being right are disproportionate. Because of the long tail distribution, being right will make you very right, and rich. That win will pay for all the failures. In fact it’s an interesting exercise to think that maybe the long tail distribution of returns is the only way it could work and maybe it’s a long tail precisely because it has to be.

In any case, these firms place a number of bets. Let’s say they invest in ten companies, book authors or movies at $10MM each. Then we hope one of them becomes a billion dollar exit (Google, Harry Potter or Lord of the Rings). That will pay for the other 7 that blow up and the 2 that do ok. Things blow up all the time, like Solyndra or Waterworld.

In this model the firms have to raise the capital to make these bets, either from past lottery winnings or from investors. But when you think about todays service businesses the model is very much inverted.

Instead of you paying to place the bets, the customer is paying you. You have a large number of companies paying you $5/month for some minimal service level and then some of them will randomly take off and start paying you $1,000/month or whatever it happens to be. Thus by providing a very visible self-service model you can expose yourself to some large upside almost automatically. This optionality is interesting; in that your customers are paying you to take the option.

Of course, they can always jump off your service too. But if you’re doing your job they won’t do that; you just have to create different incentives and value models as you go up the stack. You need more features as the price increases, better customer service and so on.

Compare and contrast this to you having to pay to take the bet. Under that model you have to go find the customers where here they find you. You have to build narratives about why they will succeed instead of them doing so. All in all, it’s a lot nicer when they come to you.

Also notice that we’re smoothing the price function. Instead of not funding your movie or funding it as a binary, $0 or $10MM bet, you pay whatever you want. Maybe it’s $5/month, maybe it’s $100/month but we’re still exposed to the upside while covering costs for the low end of the market instead of just turning those options away.

The other thing that’s evolved is the sales process. Instead of me having my bizdev guy talk to your bizdev guy to get business, your developer just happens upon my service and starts playing with it. Instead of exchanging press releases, our developers talk about how awesome everything is. It’s much more efficient that way, especially when getting started. You don’t have to pay for your developer to talk to their PM to talk to their bizdev guy to talk to my bizdev guy to talk to our sales rep. Your developer just talks to my developer. That’s cheaper and quicker for you and for me. We’re reversing the causality here too; my bizdev guy doesn’t contact 100 companies to find 10 that might use the service. The 100 companies just find me instead.

Back to Auth0. I like Auth0 for a number of reasons:

  • Making Enterprise Easy. You might not be aware, but everyone uses ActiveDirectory or AD. It’s great for a number of things like making Office and Lync and various DRM things all work together when you’re a real company. But it sucks if you want to expose your users externally. For example you want your employees to be able to use their username and password (credentials) to log in to your healthcare provider. Auth0 makes that magically (and securely!) work.
  • Making Hacking Easy. Doing away with the “user” table. I see the primary advantage of Ruby on Rails as doing away with having to learn SQL. Thus I now “only” need to know HTML, JS and ruby. Parenthetically, you see things like meteor making this an even shorter list of just HTML and JS. What Auth0 does for me as a developer is remove all the user pain. I don’t need to start building my app with an email authentication loop, an email server and SQL table or whatever, now instead I just insert a couple of lines of JS and let Auth0 handle that. Gradually we are chipping away at all the things you need to do to get a web app up and working.
  • Auth0 hides complexity. It’s a real pain to go set up authentication with the 1,001 providers like Google, Microsoft, Twitter, Facebook and so on. What Auth0 does is magically hide all that pain via their very cute dashboard.
  • Openness. Auth0 is all over github.
  • New things. Auth0 just shipped a wordpress plugin to let you login to your wordpress instance using, basically, anything you can think of. This is great; no more authentication loops dropping users at the first hurdle!
  • People. It’s easy to turn money in to smart people working for you. But it’s really hard to get the quality, depth and breadth Auth0 has without doing something truly meaningful. Auth0 is great people doing great things.

And of course, Auth0 is exposed to the kind of optionality I described above as many others are too. So, if you have any interesting authentication go play with Auth0.

BDNT Event Review

I went to a tech meetup, BDNT, last night in Boulder. I used to go often when I lived in Denver a couple of years ago. Six or so startup-alikes get five minutes to pitch then five minutes for questions. These are the three that I remember:

 

ambientbox

AmbientBox pitched an analytics platform for restaurants, bars and shops. You buy a magical box ($250) and plug it in. It records various things like noise level, CO2 (to detect how many people are in the room), lighting levels and so on. It uploads this and then you use an app to figure out when the ambiance is “good.” A pretty ipad app or website will theoretically let you use this data to figure out how to improve your space, get more customers and so on. You pay $100/month or something. Sort of Nest for restaurants, maybe.

My thoughts:

  • Basic idea is kind of interesting.
  • A magical box sounds painful. Why can’t this just be an smart phone app to start? It has a camera and microphone on it minimum.
  • CO2 sensor sounds interesting, but I’m willing to bet it correlates with noise level and is irrelevant.
  • Low end restaurants won’t give a crap about this. High end restaurants will pay someone. The middle ground sounds like a smaller market?
  • The great part about this is that it gives your restauranteur the feeling of being in control and making progress. Even if it’s bullshit, there are lots of people who’re happy to pay for pretty graphs and to pay for the feeling of control. Another way of putting it; it’s enough data to hang yourself with.
  • Visualizations were pretty.

 

chatlingual

ChatLingual is magical IM chat on the web with seamless translation between languages. So, we each chat in our language and it’s translated on the fly. Monetization is a little unclear, pay per chat, tokens or something. Secret plan is to build the best translation engine possible.

Thoughts:

  • Super pretty and clean UI.
  • If I’m cheap, I’ll go use Google translate or something. If I have money and I have some nuanced conversation with reserved Japanese executives, then I need a professional translator?
  • The data collection secret plan is good, but super long range. Sounds like free basic usage plus additional services (e.g. freemium) would work well. Computer translation for free, real bilingual people for $20/hour or whatever.
  • Would be a useful feature for odesk / elance so I can communicate better with freelancers
  • The flip side, is that it might just be a feature. Don’t IM clients do this already?

 

fittrip

FitTrip is (will be) an iPad app which makes working out more fun. You connect a heart rate monitor and your iPad magically shows you a video of you, say, running the grand canyon. If your heart rate speeds up then the video speeds up, like you’re really there. Content is paid for; so you get one free virtual run then you pay to run other places. There are competitors out there for this idea.

Thoughts:

  • The guys asked the audience if they’d pay $5 for a trip. This is an awful way to ask about pricing. You need to ask “what is a cheap price”, “what is an expensive price” and so on.
  • Most of the audience, 100+ people, put their hands up to the $5 question. This is wacky. What they should have asked is how many people have iPads, heart rate monitors, a running machine and work out. And want to pay for this app content. It’ll be a much smaller percentage.
  • If I’m going to pay for an iPad, a heart rate monitor and the app, and a gym membership or running machine, couldn’t I just fly to the grand canyon for less money and run for real? (Answer is yes, you can).
  • The guys mentioned 60% of gym memberships are paid for but unused. That is, people don’t show up to the gym. They said this like it’s a bad thing. Gyms love that, it’s free cash flow. The last thing in the world a gym wants is customers to show up, the same way a bank doesn’t want us all showing up to withdraw money at the same time.
  • All that said, the app was very pretty.
  • It’s a large, irrational market, just look at that 60% of gym members who don’t show up, but still pay. So even crazy stupid ideas can work.

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