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business – Page 2 – jstrauss

Tag: business

Delicious Bookmarks for March 31st through April 2nd

These are my Delicious links for March 31st through April 2nd:

  • Social Media ROI – Solid presentation on how to approach social media marketing from a quantitative perspective. Most interesting are the examples of different types of social media campaigns to drive different business goals. There is no one-size-fits all social media marketing campaign.
  • The Lab – A web-based Sass -> CSS compiler. Sass is basically a shorthand way to write stylesheets for your website. It allows for nesting with two spaces. Also, it can do some basic math with constants. No more going around your CSS files updating the size or color of something.
  • Newspapers and Thinking the Unthinkable « Clay Shirky – "When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse…With the old economics destroyed, organizational forms perfected for industrial production have to be replaced with structures optimized for digital data. It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem."
  • Changing Nature of Virality: Facebook and Twitter – A consolidation of interesting stats from Hitwise on percentages of traffic to entertainment sites driven by Twitter and Facebook. For example, perezhilton.com's biggest week ever was driven primarily by traffic from Facebook (8.70%) over Google (7.62%). It is clear that for certain types of sites, particularly entertainment-oriented, 'viral' discovery is an increasingly important discovery mechanism being fueled by the growth of social media sites like Facebook and Twitter.
  • The Rising Power Of Social Media As A Traffic Driver – Fred Wilson on the impact he's seeing to traffic on his own blog from Twitter and Facebook: "Links are the currency of the web and traffic is money so these are important trends for our portfolio companies and for everyone who does business on the web."
  • Tony Hsieh: Zappos In The Business of Selling “Happiness” – This was a really great presentation that i was lucky enough to attend in person. Some of my favorite quotes were "Hire slowly, fire quicky", "When all your employees live the brand, you don't need to rely on marketing and PR to handle all your communications", and "We decided to take all the money we would have put into marketing and put it into making the customer experience better." While I do feel that Zappos sounds more like a management/corporate culture experiment than a business, I still think there are a ton of great lessons that less altruistic businesses can apply. My primary takeaway was probably on Slide 17 of the presentation, the idea of "Committable Core Values": having a company mission that is actionable for every employee.
  • Economy Tech trends in 2009 by Mary Meeker (Morgan Stanley) – An omnibus presentation on the current economic climate and the high-level trends that will drive the technology industry in the near future. The first ~40 slides contain some really interesting data and charts on the larger macroeconomic situation and are worth looking at even for people not interested in the technology industry.
  • The Memefication of Your Band – A more pragmatic take on the entertainment-as-a-service concept focused on how musical artists can more effectively promote themselves. "Your band must invade the Perception Economy. Your Band must no longer be a band. Your band must be a meme. A Meme Which Generates subMemes. These memes must be compelling, intriguing, and interesting enough for people to ‘follow’ or at least think that you are ‘worth following.’"
  • High-tech Market Research and Consulting – Quantitative application of the Lanchester model, a WWII military strategy framework, to business in which market share is the proxy for number of troops. Interesting theoretical construct for understanding how players with differing market share should seek to compete in order to maximize their competitive advantage — i.e. smaller players should seek to segment a larger market into smaller pieces in which they can compete closer to market share parity while larger players should seek to compete in the broadest market possible to maximize the value of their dominance.
  • WordPress › WP Greet Box « WordPress Plugins – A very useful WordPress plugin that shows visitors to your blog a unique greeting message depending on the page they are visiting from. E.g. Ask users coming from Digg.com to Digg your post, etc.
  • Chat Catcher – An interesting service to help you track mentions of your blog posts across Twitter, FriendFeed and identi.ca and aggregate them back to your blog. The coolest thing is probably the 'Scriptless' version which can run on WordPress.com and other hosted blogs.
  • Viral Arts: Making you money… Virally – A potentially interesting service that matches YouTube video producers with brands willing to pay them for product placement.
  • The changing face of usability testing: Optimal Workshop releases free service called Treejack » VentureBeat – Basic DIY usability testing tools that allow you to test designs in the form of online surveys. Simple, elegant, and IMHO 80/20 effective (vs full-service usability testing software).
  • Why Bit.ly Will Upstage Digg – Definitely what I would be working on if I was in charge of bit.ly. While analytics were the initial draw for sharers to use bit.ly, recognition as an influencer could be a differentiator now that others like cli.gs and tr.im are commoditizing analytics for shortened URLs. I totally agree with Om that a bit.ly powered Digg (Bigg?) would produce much more interesting and representative results than Digg, which has come to be dominated by an idiosyncratic user community. Also, I think it would be foolish of Bigg to be reserved to bit.ly URLs. Why wouldn't they want share/click data from all the shortened URLs they can get it for?
  • Topspin » “Josh Freese. What are you doin’? This summer.” – Brilliant (and hilarious) showcase of how the internet can make even the way you sell your art part of the experience. Definitely worth the read! My favorite is the $10k package, which includes: "Josh takes you and a guest to Club 33 (the super-duper exclusive and private restaurant at Disneyland located above Pirates of the Caribbean) and then hit a couple rides afterward (preferably the Tiki Room, the Haunted Mansion and Tower of Terror) / At the end of the day at Disneyland, drive away in Josh’s Volvo station wagon. It’s all yours … take it. Just drop him off on your way home, though, please."
  • Relationship Symmetry in Social Networks: Why Facebook will go Fully Asymmetric – Bokardo – A very interesting analysis of the difference between the asymmetric relationship model of Twitter (arguably pioneered by Flickr) and the mostly symmetric relationship model of Facebook today and why the reality of attention inequality is a barrier to Facebook's growth as long as they stick to symmetric relationships.

Delicious Bookmarks for February 19th through February 25th

These are my Delicious links for February 19th through February 25th:

  • HTML URL Encoding Reference – Handy table of the URL encoded values for ASCII characters.
  • A foot and a half: Finally, A Use for Twitter – Greatest Twitter story evar! I actually saw these tweets from @the_real_shaq while this was happening, now we get the backstory from the guys for whom they were intended. I <3 Shaq!
  • The Crisis of Credit Visualized – Astute, approachable, and just plain pretty animated explanation of our current economic situation. Oh, and did I mention INCREDIBLY FRIGHTENING!? Once you realize how simple, and thus fundamental, the underlying problems are, it becomes very difficult to believe in a quick or easy fix. Now, back to stuffing my remaining cash into my mattress…
  • How Freshbooks Built an Army of Passionate Evangelists on Twitter. How are YOU doing so? | Blog of Mr. Tweet – A great story from a company passionate about serving customers and building relationships with them (CRB = customer relationship building) and how they extended the reach of that passion through Twitter. Worth the read.
  • The Missing Google Analytics Manual | FutureNow’s GrokDotCom / Marketing Optimization Blog – A comprehensive collection of the most helpful links and videos to teach you how to get the most out of Google Analytics.
  • Coding Horror: Commandos, Infantry, and Police – Quotation of a legendary analogy from Robert X. Cringely’s “Accidental Empires” published in 1993. Cringely characterizes the successive waves of employees who staff a company through its lifecycle from startup to industry leader to incumbent as commandos, infrantry, and military police, respectively.”The [commandos’] job is to do lots of damage with surprise and teamwork, establishing a beachhead before the enemy is even aware that they exist. Ideally, they do this by building the prototype of a product that is so creative, so exactly correct for its purpose that by its very existence it leads to the destruction of other products. They make creativity a destructive act.”
  • Add Community to your Site with Triggit! – An interesting idea of using Twitter as a platform to create user communities for your site (a la MyBlogLog). The differentiator is supposed to be that the community discussions happen publicly on Twitter, thus driving more traffic to your site.
  • GroupTweet – Cool simple tool to create what are essentially Twitter group mailing lists. You set up a Twitter account for your group, register it with GroupTweet, and then it’s just a bot that RTs any DMs sent to the group account. In order for a group member to be able to post to the whole group, they need to be followed by the group account. And you can control who reads the group messages by protecting the group account’s updates. Simple, elegant, effective.
  • Analytics Talk » Blog Archive » Tracking Sub Domains with Google Analytics – Best article I could find on how to track subdomains properly in Google Analytics. Surprised they don’t do it right out of the box. But, these easy to follow instructions and screenshots will get you sorted quickly.

Crystal Ball for Studio Execs or WWJD?

My dad and I had a long conversation over lunch today (at In-N-Out 🙂 ) about my most recent blog post. He mentioned that the studios are keeping a close eye on what is happening in the music industry as a preview of their own potential future 5 years down the road, and that they are taking preventative measures based on what they see. I replied with two reasons why I don’t think that’s something to brag about. First of all, that 5 years is more like 2 years (if that) and it’s shrinking every day. The pace of technological progress has only accelerated since it first began to disrupt the music industry, and it ain’t slowing down. Secondly, the film industry’s approach to understanding the data has been merely to plot historical events and interpolate a trajectory. They have made no attempt to understand the underlying equation and thus extrapolate the end-result. In high-school trigonometry terms, they are plotting points on the left half of a parabola without understanding that they are part of the graph of y=x^2. How do I know this? Because you can see it in their actions, they are clearly trying to treat a growing number of symptoms with no clue about the nature of the underlying disease.

My dad agreed with me and then said there’s a lot of money to be made by the guy who can show them what the future really holds. Being the giving person that I am, I hereby offer it to them free of charge (and with charts, no less!):

Audience Graph
First of all, your audience is moving from conventional offline distribution channels to new online ones. You may think you have the control to slow this, but you don’t! At this point, you must consider it *axiomatic* that every genie will get out of every bottle. There are over a billion people on the Internet, and it just takes one to put your content on BitTorrent and all your anti-piracy efforts are rendered moot. Content consumption is moving from offline to online whether you like it or not. So, you have a choice: get on-board by giving consumers what they want and keep some of them as customers, or drive them away entirely by ignoring their needs. If you choose the latter, you probably won’t ever be able to win those lost customers back. And even if you choose the former, you will most likely never be able to aggregate the same size audience for a given piece of mass-market content online as you could offline. Mainstream media (or ‘head’) content is a first-class citizen offline, where there is artificial scarcity and so being first in line counts for something. But, there is an (effectively infinite) abundance of content online and what matters most is finding what is most interesting to me.

ARPU Graph
That’s the bad news. Here’s the good news, by moving online you can build deeper relationships with that smaller audience and explore variable pricing options to increase the average value of each individual fan (again I reference Josh Freese, who illustrates this point not without irony). However in order to fully engage your most passionate fans and get them to give you more money, you can’t continue to just sit back and pump out passive entertainment experiences with some snazzy marketing around it. You will need to invest in turning your content into 360° entertainment and change your mentality about selling it as a packaged good.

Cost Graph
Yes, I know that sounds expensive. It definitely won’t be cheap and will require you to build out new competencies you don’t have today. But you’ll be able to pay for it (and then some) with all the money you save by getting out of the very expensive mass-market content and offline distribution businesses.

So if you’re willing to become an online-first media company, I think I can promise you’ll return to profitability in 5-10 years depending on how quickly you move to jettison your legacy offline businesses. Now, your shareholders may not be so keen on all these restructuring costs and write-downs, not to mention all the money you’re going to be leaving on the offline distribution table by focusing on getting into the online business while you still can. But, that’s ok because they value the long-term survival of the company over short-term profits. Right? </sarcasm>

Mass-market content and offline distribution are declining businesses, but they are still quite profitable. Especially compared to niche content and online distribution, which are clearly ascendent but still a rounding error to the bottom-line of these major media companies (not to mention the corporations that own them). I believe the decline of the former is going to be a lot quicker than the entertainment industry thinks (because they believe they can control it and they don’t understand the exponential acceleration of technological progress) while the rise of the latter will be retarded by a lack of investment in developing the infrastructure to make it a profitable business. The film industry obsessively spends hundreds of millions of dollars to build the biggest anti-piracy stick they can while watering the online video carrot with an eyedropper. If they were to put meaningful time and money into figuring out how to make legal online content consumption compelling and profitable, it would be more effective than spending a hundred times that on anti-piracy efforts. But they won’t, instead they will continue to do everything they can to prop up dying (but profitable) revenue streams, including stifling the growth of the emerging revenue streams that could one day take their place. And so, the studios will some day (soon) find themselves with not enough offline money and not enough online audience from which to try to make money.

If I were the head of a studio, I would stop trying to figure out how to grow the buggy whip business by keeping down the automobile. I would also recognize that transforming my profitable if shrinking buggy whip business into a money-losing automobile business making it up in volume is probably not in the best economic interest of my shareholders. So instead of throwing good money after bad trying to keep the overall buggy whip market from shrinking, I would focus on getting as much share as possible while all my competitors spent their time futilely worrying about the cars. I would ruthlessly cut costs to maintain profitability in the face of shrinking demand. And, I would put all those profits into a dividend so my shareholders would stop pressuring me for growth that isn’t there. Finally, when it’s time to close my buggy whip factory’s doors, I would take all that dividend money I earned and put it into the best automobile company I could find (and then I would be sure to sell that ~80 years later 😉 ).

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Entertainment-as-a-Service

[Cross-posted from my company blog.]

I just got back from a really fun (and delicious) lunch with Peter of Pantless Knights, who is in LA working on a hilarious new video, and one of the main things we discussed was the idea of Entertainment-as-a-Service. The term is a reference to the concept of Software-as-a-Service (SaaS), which is a business model generally contrasted with the conventional packaged or ‘shrinkwrap’ software model. Essentially, SaaS is a subscription business and packaged software is a retail business.

The entertainment industry is a retail business. Books, movies, tv shows, music are almost universally sold as one-off purchases. But, those things are just the packaging and the people selling them to you are just middle-men. The business of entertainment (not to be confused with the entertainment *industry*) is fundamentally a marketplace of attention between fans and content creators — fans have a finite supply of attention for which content creators are competing. So, then what is the entertainment industry? To use a very relevant analogy, it is the collection of intermediary businesses (i.e. publishers, studios, networks, labels) that have been acting like investment bankers, taking the raw materials of talent and creativity and packaging them up in a form they know how to sell (i.e. retail) and commanding a big slice of profit along the way. Entertainment doesn’t want to be a retail business, and that is the fundamental essence of the disruption the Internet has unleashed on the entertainment industry.

[Clarification: For the sake of this discussion, I’m using the term ‘content creator’ to represent those who add unique creative talent to the production process. As my dad pointed out, content creation is rarely a solo effort (most notably in film production, which can involve hundreds of individual contributors) to which studios, networks, labels, and publishers often contribute substantial value. But as those contributions are opaque and thus interchangeable as far as the consumer is concerned, I am excluding those who make them from the class I refer to as ‘content creators’ in this post. Otherwise said, even though the sound engineer plays a crucial role in creating the album, no one buys it based on *who* the sound engineer was.]

When you think about what elements of the entertainment business technology has really undermined, it’s nothing more than the packaging — the time slots and release dates and viewing windows and region codes that are artificial constructs of these middle-men trying to slice-and-dice the content into as many tranches as possible to squeeze out every last cent of profit. Just like the investment bankers and their CDOs fragmented and obscured the connections between investors and their investments, so have the studios, networks, publishers, and labels introduced complexity into the connections between content creators and their audiences. While that complexity, and the companies who created it, may have been a necessity in an era of technologically inferior marketing and distribution systems, they are simply market inefficiencies in the Internet age.

So, what is the difference between retail and subscription when it comes to entertainment? In a recent post on my personal blog about SaaS vs shrinkwrap software, I wrote:

The business model of packaged software invites feature bloat, because it’s upgrade driven and you need to continually find ways to justify why Thingamajig 2009 Pro Edition™ is so much better than Thingamajig 2008 Pro Edition™. Software as a Service businesses have a much different (and arguably greater) challenge, they need to continue to create value for their customers month after month….So, you end up with a much more customer-centric product…and a vendor who is truly interested in addressing your customer needs.

The first priority of a retail business is to maximize sales, building brand loyalty and repeat business may be means to that end but they always take a back-seat to whatever else will drive more sales. Whereas in a subscription business, customer retention (and thus customer satisfaction) is always top priority, even above new customer acquisition. So if a studio believes they can get a lot of people to see a crappy movie by spending more on marketing and less on quality, they will (and do, again, and again, and again…). Because all you’re buying from them is the packaging, they know you aren’t really paying attention to whether it’s a Fox or Warner Brothers or Paramount film (do you buy your cereal based on who made the box it comes in?). But, a director would rather disown a bad film than endorse the studio releasing something that doesn’t meet his standards and his fans’ expectations. This is because the director knows that his relationship with his fans is a subscription business, and if he disappoints them he will be unable to continue exchanging his content for their attention in the future. The studios understand this too — they don’t give Tom Cruise $25M (plus a cut of the gross) per movie because his acting skills bring $25M of quality to the screen, they do it because he has more than $25M in ticket, DVD, and merchandise sales worth of fans.

Entertainment is naturally a subscription business, and the Internet returns it to its natural state. The content creators who thrive online are those who understand this and focus on the ongoing satisfaction of their customers (see Ze Frank, Michael Buckley, Chris Leavins). The level of customer satisfaction these creators deliver is really only possible on the Internet because they can go direct-to-consumer without need of the middle-men and their packaging. These creators publish in all forms — video, photos, blogging, micro-blogging, music. They do not see themselves constrained by the legacy dividing lines of the entertainment industry, their goal is to entertain their audience by any and all means available. There is no distinction for them between primary and ancillary content, they are 360° entertainment brands. The other thing that has made these creators so successful online is their direct interaction with their customers. The best your most engaged fans can do offline is give you their personal attention (and the money that comes with it) and try to recruit others to do so as well. But online, they can interact with you and become part of the show. Empowering your customers is the surest way to make them even more engaged. As I wrote in another recent post on my personal blog:

Bringing your customers into the product development process has the dual benefits of helping you build better and more customer-centric products and making your customers your most passionate sales people (because after all, it’s their product too).

So, the Internet enables these creators to spend more time listening to their fans and creating new content they’ll enjoy while outsourcing the marketing to the community for free. This is the exact opposite of the offline retail model in which the studio takes money out of production budgets to put it into marketing campaigns. The ability to establish deeper relationships with their fans also allows online content creators to attain higher average attention per customer (ARPU) than is possible in the retail world, thereby making it easier to build more value by going deeper with a smaller audience.

To be clear, I’m not trying to say the only business model for content on the Internet is a recurring subscription fee. The ‘subscription business’ to which I’m referring is more the theoretical exchange of value between content creators and their fans, which can and will take many forms — including selling packaged goods. I’m also not saying that the online entertainment market is solely the domain of Internet-only content creators. In fact, I believe the Internet is most powerful as an entertainment marketplace when the quality and reputation of a historically offline content creator is freed of the constraints of the legacy packaged goods business model. Take for example Josh Freese, who gets extra points for using this freedom precisely to illustrate the absurdity of the conventional retail approach.

And now, I leave you with the profound product of the coming entertainment revolution:

P.S. Hat tips to Ian Rogers for the marketplace of attention thinking and Umair Haque for the marketing vs quality dichotomy.

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Delicious Bookmarks for February 3rd through February 9th

These are my links for February 3rd through February 7th:

  • 5 Lessons I Learned After a Year as a Digital Nomad – The best piece of travel advice I've heard in a while: know the difference between traveling and living. If you're going to some place interesting, don't expect to have time to do other stuff like work. You'll just end up choosing between missing out on all the cool things to do where you are (and thus resenting your choice) or feeling guilty about not doing whatever it was you thought you were going to get done.
  • Dan Gilbert asks, Why are we happy? | Video on TED.com – Dan Gilbert, author of Stumbling on Happiness, challenges the idea that we'll be miserable if we don't get what we want. Our "psychological immune system" lets us feel truly happy even when things don't go as planned. This is a really great talk. Well worth the 20min it takes to watch. You will be amazed at the empirical evidence on how bad humans are at predicting our own happiness and how subjective and relative happiness actually is.
  • Kareem Mayan’s Weblog: customer experience, emerging technology, media, and more – A great (old) blog post by Kareem on what makes people truly happy, how bad we are at predicting it, and how so few of us actually pursue it. Kudos to Kareem for taking his own advice and deciding to align his life to best pursue his dreams of traveling around the world (http://howsthewifi.com). The video at the end of this post is a must watch. Unfortunately, the embed is now broken – so, go see it here: http://www.ted.com/index.php/talks/dan_gilbert_asks_why_are_we_happy.html
  • random($foo): Online Tools for A New Small Business – Leonard Lin's list of recommended business tools for startups. Covering accounting, CRM, marketing and development.
  • Why Should I Care What Color the Bikeshed Is? – "The really, really short answer is that you should not. The somewhat longer answer is that just because you are capable of building a bikeshed does not mean you should stop others from building one just because you do not like the color they plan to paint it. This is a metaphor indicating that you need not argue about every little feature just because you know enough to do so. Some people have commented that the amount of noise generated by a change is inversely proportional to the complexity of the change."
  • FT Alphaville » Blog Archive » Happy Boycott CNBC Day! – "The real problem with mullets and Pabst and Toby Keith songs, and with CNBC, is that there are people, large swaths of humanity, in fact, who apparently regard the above unironically."

These are my Delicious links for February 3rd through February 9th:

  • TechStars » Seed capital and mentorship for startups – Documents that TechStars uses as a starting point for seed stage financing for their companies. Aimed to be model documents for an angel or seed financing in the $250k-$2M range. They represent a “light” preferred equity financing and have very simple terms that are generally “balanced” but if anything lean toward the entrepreneurs and represent a great deal of trust in them, which they think is appropriate for angel deals where you are primarily investing in the people at the early stage.
  • 5 Lessons I Learned After a Year as a Digital Nomad – The best piece of travel advice I've heard in a while: know the difference between traveling and living. If you're going to some place interesting, don't expect to have time to do other stuff like work. You'll just end up choosing between missing out on all the cool things to do where you are (and thus resenting your choice) or feeling guilty about not doing whatever it was you thought you were going to get done.
  • Dan Gilbert asks, Why are we happy? | Video on TED.com – Dan Gilbert, author of Stumbling on Happiness, challenges the idea that we'll be miserable if we don't get what we want. Our "psychological immune system" lets us feel truly happy even when things don't go as planned. This is a really great talk. Well worth the 20min it takes to watch. You will be amazed at the empirical evidence on how bad humans are at predicting our own happiness and how subjective and relative happiness actually is.
  • Kareem Mayan’s Weblog: customer experience, emerging technology, media, and more – A great (old) blog post by Kareem on what makes people truly happy, how bad we are at predicting it, and how so few of us actually pursue it. Kudos to Kareem for taking his own advice and deciding to align his life to best pursue his dreams of traveling around the world (http://howsthewifi.com). The video at the end of this post is a must watch. Unfortunately, the embed is now broken – so, go see it here: http://www.ted.com/index.php/talks/dan_gilbert_asks_why_are_we_happy.html
  • random($foo): Online Tools for A New Small Business – Leonard Lin's list of recommended business tools for startups. Covering accounting, CRM, marketing and development.
  • Why Should I Care What Color the Bikeshed Is? – "The really, really short answer is that you should not. The somewhat longer answer is that just because you are capable of building a bikeshed does not mean you should stop others from building one just because you do not like the color they plan to paint it. This is a metaphor indicating that you need not argue about every little feature just because you know enough to do so. Some people have commented that the amount of noise generated by a change is inversely proportional to the complexity of the change."
  • FT Alphaville » Blog Archive » Happy Boycott CNBC Day! – "The real problem with mullets and Pabst and Toby Keith songs, and with CNBC, is that there are people, large swaths of humanity, in fact, who apparently regard the above unironically."

SaaS vs Shrinkwrap or Never trust a company not on Twitter

While eating lunch today, I started to think about the growing complexity of my company‘s expenses and decided it might be a good time to start looking at accounting solutions. The fact that my research began with a tweet is indication enough that I probably don’t fit anyone’s average consumer mold. But, I think some of the insights that came out of my experience are pretty fundamental and potentially extend beyond the ‘early adopter’ echo chamber.

First, I started down the conventional route by checking out market (and marketing) leader QuickBooks. Through some quick web searching, I found a few authoritative sounding comparisons that pegged QuickBooks as the best value for basic users (we’re just at the lower bound of even needing this stuff) — with the notable exception of the Mac version, which apparently gets less product development love than the Windows one. At $180, QuickBooks wasn’t really that daunting on the financial cost front. But, I was already starting to cringe on the usability/time cost side.

What I found myself really wanting was a web app (like Mint or Wesabe) for business accounting — something with a lightweight interface for connecting and organizing data from my financial services providers all in one place. And while I was researching products that might fit this bill, I started to think about why I had this innate preference for a web app (SaaS) over shrinkwrapped software. The business model of packaged software invites feature bloat, because it’s upgrade driven and you need to continually find ways to justify why Thingamajig 2009 Pro Edition™ is so much better than Thingamajig 2008 Pro Edition™. Software as a Service businesses have a much different (and arguably greater) challenge, they need to continue to create value for their customers month after month. Sometimes that value comes in the form of new features, but it doesn’t *have* to. So, you end up with a much more customer-centric product (what customers *know* they want after using it, not what they *think* they want before buying it — as humans are notoriously bad predictors of our own happiness) and a vendor who is truly interested in addressing your customer needs. So, unless there is an element of the problem a given software product is trying to solve that inherently benefits from the advantages of the desktop (i.e. local storage, access to the file system/peripherals, superior performance), I’d rather have the SaaS version.

The other thing that was on my mind when doing this evaluation was my incredibly positive recent experience on Twitter with the CEO’s of iPlotz and Balsamiq, both of which happen to be SaaS products. I realized that it really spoiled me and there’s no way I’m ever going back to the old regime of captive audiences and passive customers. So, my new rule is “never trust a company not on Twitter.” Now, that’s a bit reductionist — and, in Intuit’s defense, they are actually on Twitter (hi Alison 🙂 ). The real point is that today’s customer service equation needs to include how responsive the company is to your new product requirements and feature requests, not just how quickly they fix something when it’s broken or answer a question when you’re too lazy to read the instructions. As much as I appreciate Intuit’s presence on Twitter, I highly doubt Alison is able to change Intuit’s release schedule to get that new feature I want out to me sooner. By virtue of the packaged software business model, she is not adequately empowered to address my customer needs.

Through my research and a very handy post on my friend Leonard’s blog (thanks for the tip Carrie), I found two SaaS solutions for small business accounting: LessAccounting and Xero. They’re both about the same price ($~25/month), and Xero seems to have a slightly superior feature set (automatic syncing with your online accounts is a biggie). But, LessAccounting clearly had the edge in customer interaction. LessAccounting has a very active corporate Twitter account and both founders have personal accounts, they use Get Satisfaction and there are 4 topics on their Get Satisfaction page that have been updated in the last 24 hrs (I also checked out the activity on the Get Satisfaction accounts of both founders), and, last but not least, they have a sense of humor (be it a slightly mean one 🙂 ). Xero has a very active corporate blog and they seem to be quite responsive to their customers’ comments. But as a prospective customer, I would really like to have some better ways to interact with Xero than sending them an email or leaving a comment on their blog. (Update: Phillip from Xero responded in the comments that they do in fact have a Twitter account and an in-product feedback mechanism.) Get Satisfaction and User Voice are both great names, because when you use their products as a company that’s exactly what you do: give your customers a voice and the satisfaction that it’s being heard.

When shopping for SaaS, you’re choosing a partner in innovation. So, the future direction of a product is maybe an even more important consideration than the current feature set. And while LessAccounting can surely replicate Xero’s features, can Xero replicate LessAccounting’s customer-centricity? They both offer 30 day free trials, so I’m going to try both and make a decision in a month. And who knows, at $180 for QuickBooks Pro I may decide shrinkwrapped software is the more sensible way to go this time around (but, that doesn’t mean I have to like it 😉 ).

Update: Wow! This is starting to freak me out. I write these things to capture the distillation of the things I see out on the interwebs that I like and dislike, mostly for my personal benefit in thinking about my own business. I don’t do so really anticipating to hear back from the companies about whom I’m writing, but I guess I’ll just have to get used to this whole blogging thing 😉 .

Thanks to Phillip from Xero and Allan from LessAccounting for your responses in the comments and for engaging in the conversation. Phillip corrected me that Xero does have a Twitter account, which I updated in situ above.


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Delicious Bookmarks for January 27th through February 1st

These are my links for January 27th through February 1st:

  • Bookmarklet Builder – Handy tool for building bookmarklets, can convert back and forth from normal Javascript to bookmarklet form.
  • TwitterFriends – Your relevant network on Twitter – The most comprehensive (and interesting) Twitter stats application I've found to date. Instead of gimmickry about how you rank against other Twitter users in meaninglessly vague and opaque terms like "authority," this exposes the hard data about yours and your network's behavior compared to average, and gives you some pretty cool visualizations. If I understood statistics and such better, I think this is the kinda tool I could totally geek out on.
  • Which HD video Web service is the best? | Webware – CNET – In depth side-by-side comparison of online video hosting services.
    "- The victor: YouTube
    This time around, we feel really comfortable giving YouTube the quality crown. Its HD encoding is really nice, and you can't beat the price (free). One thing that really separates it from the others is that you can do so many things with your clip once it's up there. You can replace the music, as well as add subtitles and annotations. Community members can also respond to it, adding in-line video replies."
  • The Bacon Explosion – Take Bacon. Add Sausage. Blog. – NYTimes.com – A (very tasty) example of the power of social media to spread content virally. According to the article, the blog post about this recipe garnered 27,000 views 2 days after being posted thanks mostly to Twitter, Digg, and StumbleUpon. In the month since being posted, it has been viewed 390,000 times and linked to from 16,000 sites. Not bad for some bacon.
  • Secrets of my success: Netflix CEO Reed Hastings – Jan. 28, 2009 – A brief profile on Reed Hastings w/ business tips:
    – Target a specific niche: When there's an ache, you want to be like aspirin, not vitamins. Aspirin solves a very particular problem someone has, whereas vitamins are a general "nice to have" market.
    – Stay flexible: We named the company Netflix (NFLX), not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet.
    – Never underestimate the competition: We erroneously concluded that Blockbuster (BBI, Fortune 500) probably wasn't going to launch a competitive effort when they hadn't by 2003.
    – There are no shortcuts: Occasionally great wealth is created in a short amount of time, but it's through a lot of luck in those situations. You just have to think of building an organization as a lot of work. It may or may not turn into great wealth.
  • Streaming video cannibalizing DVD rentals, says Netflix – Ars Technica – Netflix results show that streaming video views are taking away from DVD-by-mail volume. Given that there is no price difference (both streaming and DVD-by-mail cost the same per month), the streaming bitrate is at DVD quality or less, and the selection of films available for streaming is worse than that of DVD-by-mail, this is further proof that *convenience* (the only real advantage of streaming vs. DVD-by-mail) is a very powerful motivator for media consumers.
  • Facebook Pages Leaderboard – A neat tool for tracking the popularity of Facebook Pages by number of fans over time. However, the data doesn't appear to be totally reliable. So, be sure to check the current stats on Facebook before hanging your hat on any of these numbers.
  • Announcing the AllFacebook Pages Tracker – Interesting facts about Facebook Page fan stats (as of January 27, 2009)
    – Barack Obama is #1 w/ 4.7M fans, Homer Simpson is #2 w/ 2.6M, and Coca-Cola is #3 w/ 2.3M (I pulled the stats for these from Facebook directly)
    – All Facebook is tracking 620,000 Pages
    – Only 50,000 Pages (~8%) have > 1,000 fans
    – Only 276 Pages (~0.04%) have > 500,000 fans
  • Deborah Schultz: Life isn’t binary, neither is the Social Web – "The social web is my web – it's PERSONAL to me. I am not creating media when I am online so much as I am connecting with people using media as my medium…The social web can actually provide much deeper and more interesting connections for customers and companies than simply being a marketing channel – it ties into the entire product lifecycle. And that is where stuff gets really interesting…and much more complex. This is where relevance and context and trust and intention all come into play."

These are my Delicious links for January 27th through February 1st:

  • Bookmarklet Builder – Handy tool for building bookmarklets, can convert back and forth from normal Javascript to bookmarklet form.
  • TwitterFriends – Your relevant network on Twitter – The most comprehensive (and interesting) Twitter stats application I've found to date. Instead of gimmickry about how you rank against other Twitter users in meaninglessly vague and opaque terms like "authority," this exposes the hard data about yours and your network's behavior compared to average, and gives you some pretty cool visualizations. If I understood statistics and such better, I think this is the kinda tool I could totally geek out on.
  • Which HD video Web service is the best? | Webware – CNET – In depth side-by-side comparison of online video hosting services.
    "- The victor: YouTube
    This time around, we feel really comfortable giving YouTube the quality crown. Its HD encoding is really nice, and you can't beat the price (free). One thing that really separates it from the others is that you can do so many things with your clip once it's up there. You can replace the music, as well as add subtitles and annotations. Community members can also respond to it, adding in-line video replies."
  • The Bacon Explosion – Take Bacon. Add Sausage. Blog. – NYTimes.com – A (very tasty) example of the power of social media to spread content virally. According to the article, the blog post about this recipe garnered 27,000 views 2 days after being posted thanks mostly to Twitter, Digg, and StumbleUpon. In the month since being posted, it has been viewed 390,000 times and linked to from 16,000 sites. Not bad for some bacon.
  • Secrets of my success: Netflix CEO Reed Hastings – Jan. 28, 2009 – A brief profile on Reed Hastings w/ business tips:
    – Target a specific niche: When there's an ache, you want to be like aspirin, not vitamins. Aspirin solves a very particular problem someone has, whereas vitamins are a general "nice to have" market.
    – Stay flexible: We named the company Netflix (NFLX), not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet.
    – Never underestimate the competition: We erroneously concluded that Blockbuster (BBI, Fortune 500) probably wasn't going to launch a competitive effort when they hadn't by 2003.
    – There are no shortcuts: Occasionally great wealth is created in a short amount of time, but it's through a lot of luck in those situations. You just have to think of building an organization as a lot of work. It may or may not turn into great wealth.
  • Streaming video cannibalizing DVD rentals, says Netflix – Ars Technica – Netflix results show that streaming video views are taking away from DVD-by-mail volume. Given that there is no price difference (both streaming and DVD-by-mail cost the same per month), the streaming bitrate is at DVD quality or less, and the selection of films available for streaming is worse than that of DVD-by-mail, this is further proof that *convenience* (the only real advantage of streaming vs. DVD-by-mail) is a very powerful motivator for media consumers.
  • Facebook Pages Leaderboard – A neat tool for tracking the popularity of Facebook Pages by number of fans over time. However, the data doesn't appear to be totally reliable. So, be sure to check the current stats on Facebook before hanging your hat on any of these numbers.
  • Announcing the AllFacebook Pages Tracker – Interesting facts about Facebook Page fan stats (as of January 27, 2009)
    – Barack Obama is #1 w/ 4.7M fans, Homer Simpson is #2 w/ 2.6M, and Coca-Cola is #3 w/ 2.3M (I pulled the stats for these from Facebook directly)
    – All Facebook is tracking 620,000 Pages
    – Only 50,000 Pages (~8%) have > 1,000 fans
    – Only 276 Pages (~0.04%) have > 500,000 fans
  • Deborah Schultz: Life isn’t binary, neither is the Social Web – "The social web is my web – it's PERSONAL to me. I am not creating media when I am online so much as I am connecting with people using media as my medium…The social web can actually provide much deeper and more interesting connections for customers and companies than simply being a marketing channel – it ties into the entire product lifecycle. And that is where stuff gets really interesting…and much more complex. This is where relevance and context and trust and intention all come into play."

Delicious Bookmarks for January 9th through January 23rd

These are my links for January 9th through January 23rd:

  • Tube Mogul Buys Video Analytics Firm – "TubeMogul currently has over 40,000 users, ranging from networks and studios such as CBS, to web only video producers and bloggers like 'Fred.' Illumenex current clients include Internet TV pioneer Revision3 and comedy site 'eBaum’s World.'”
  • "Don’t forget…" – a set on Flickr – Really cool street art project in Berlin (where else) that is adding Photoshop interface elements to billboards to remind passers-by that these images of beauty are artificially enhanced. (via https://addons.mozilla.org/en-US/firefox/addon/9591)
  • Facebook Developers | Facebook Developers News – Facebook is now allowing custom FBML tags, essentially code libraries produced by 3rd party application developers that can be used by other application developers to add functionality from one app to another. This opens the door to officially sanctioned mash-ups of Facebook apps, which are already mash-ups in themselves. Using the term mash-up in a non-ironic fashion makes me want to punch myself.
  • The Inauguration of President Barack Obama – The Big Picture – Boston.com – A poignant collection of photos of Barack Obama's inauguration and the reactions to it around the world. My favorite is the American soldier in Iraq crying tears of joy (#19). The fact that the routine transfer of power in our country can inspire such powerful reactions around the world is evidence of what a truly global world in which we now we live. And I believe it shows that we as American citizens are making progress towards redeeming ourselves in the eyes of the world, who hold *us* (not just our leaders) accountable for the actions of our nation.
  • Transcript – Barack Obama’s Inaugural Address – Text – NYTimes.com – Text of Obama's inaugural address.
  • Rev. Lowery Inauguration benediction. Transcript. – Lynn Sweet – "Lord, in the memory of all the saints who from their labors rest, and in the joy of a new beginning, we ask you to help us work for that day when black will not be asked to get back, when brown can stick around — (laughter) — when yellow will be mellow — (laughter) — when the red man can get ahead, man — (laughter) — and when white will embrace what is right."
  • Resources Every WordPress Theme Developer Should Know About! | Arbenting – A comprehensive list of resources for WordPress Theme development.
  • YouTube Videos Pull In Real Money – NYTimes.com – Many have long claimed that the only profitable type of online video content was repurposed TV shows/films or other "professionally produced" content. This article give several examples dispelling that myth and showing that the online video audience and business has reached a point where even so-called amateurs can make real money. For example, Michael Buckley is making >$100k/year from his homegrown entertainment news show "What the Buck?" purely through YouTube's partner program.
  • Op-Ed Contributors – The End of the Financial World as We Know It – NYTimes.com – Comprehensive (if not revelatory) overview of some of the primary drivers of the financial bubble and resulting collapse by Michael Lewis and David Einhorn. Puts things like the failures of the ratings agencies and the greed of financial services company shareholders, which have been examined more deeply on their own, into the broader context of our current hindsight.
  • YouTube Is Changing How We Think About Video | Techdirt – "The power of YouTube is that it enables something entirely new and different to emerge and to thrive. In the history of disruptive innovations, merely taking a product from one medium and moving it to another usually doesn't get very far. It's the projects that really embrace the new possibilities that are only possible via that new medium that really make an impact."

These are my Delicious links for January 9th through January 23rd:

  • Tube Mogul Buys Video Analytics Firm – "TubeMogul currently has over 40,000 users, ranging from networks and studios such as CBS, to web only video producers and bloggers like 'Fred.' Illumenex current clients include Internet TV pioneer Revision3 and comedy site 'eBaum’s World.'”
  • "Don’t forget…" – a set on Flickr – Really cool street art project in Berlin (where else) that is adding Photoshop interface elements to billboards to remind passers-by that these images of beauty are artificially enhanced. (via https://addons.mozilla.org/en-US/firefox/addon/9591)
  • Facebook Developers | Facebook Developers News – Facebook is now allowing custom FBML tags, essentially code libraries produced by 3rd party application developers that can be used by other application developers to add functionality from one app to another. This opens the door to officially sanctioned mash-ups of Facebook apps, which are already mash-ups in themselves. Using the term mash-up in a non-ironic fashion makes me want to punch myself.
  • The Inauguration of President Barack Obama – The Big Picture – Boston.com – A poignant collection of photos of Barack Obama's inauguration and the reactions to it around the world. My favorite is the American soldier in Iraq crying tears of joy (#19). The fact that the routine transfer of power in our country can inspire such powerful reactions around the world is evidence of what a truly global world in which we now we live. And I believe it shows that we as American citizens are making progress towards redeeming ourselves in the eyes of the world, who hold *us* (not just our leaders) accountable for the actions of our nation.
  • Transcript – Barack Obama’s Inaugural Address – Text – NYTimes.com – Text of Obama's inaugural address.
  • Rev. Lowery Inauguration benediction. Transcript. – Lynn Sweet – "Lord, in the memory of all the saints who from their labors rest, and in the joy of a new beginning, we ask you to help us work for that day when black will not be asked to get back, when brown can stick around — (laughter) — when yellow will be mellow — (laughter) — when the red man can get ahead, man — (laughter) — and when white will embrace what is right."
  • Resources Every WordPress Theme Developer Should Know About! | Arbenting – A comprehensive list of resources for WordPress Theme development.
  • YouTube Videos Pull In Real Money – NYTimes.com – Many have long claimed that the only profitable type of online video content was repurposed TV shows/films or other "professionally produced" content. This article give several examples dispelling that myth and showing that the online video audience and business has reached a point where even so-called amateurs can make real money. For example, Michael Buckley is making >$100k/year from his homegrown entertainment news show "What the Buck?" purely through YouTube's partner program.
  • Op-Ed Contributors – The End of the Financial World as We Know It – NYTimes.com – Comprehensive (if not revelatory) overview of some of the primary drivers of the financial bubble and resulting collapse by Michael Lewis and David Einhorn. Puts things like the failures of the ratings agencies and the greed of financial services company shareholders, which have been examined more deeply on their own, into the broader context of our current hindsight.
  • YouTube Is Changing How We Think About Video | Techdirt – "The power of YouTube is that it enables something entirely new and different to emerge and to thrive. In the history of disruptive innovations, merely taking a product from one medium and moving it to another usually doesn't get very far. It's the projects that really embrace the new possibilities that are only possible via that new medium that really make an impact."
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