Learnings from 4-Hour Workweek

Principles in book:

1. Retirement is worst-case scenario insurance.
2. Interest and energy are cyclical.
3. Less is not laziness.
4. The timing is never right.
5. Ask for forgiveness, not permission.
6. Emphasize strengths, don't fix weaknesses.
7. Relative income is more important than absolute income.

Quotes:

"The first principle is that you must not fool yourself, and you are the easiest person to fool." - Richard Feynman
"I can't give you a surefire formula for success, but I can give you a formula for failure: try to please everybody all the time." - Herbert Bayard Swope
"Everything popular is wrong." - Oscar Wilde
"Action may not always bring happiness, but there is no happiness without action." - Benjamin Disraeli
"The reasonable man adapts himself to the world; the unreasonable one persists in adapting the world to himself. Therefore all progress depends on the unreasonable man." - George Bernard Shaw
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity." - Bruce Lee
"It is vain to do with more what can be done with less." - William of Occam
"Perfection is not when there is no more to add, but no more to take away." - Antoine de Saint-Exupery
"What gets measured gets managed." - Peter Drucker
"Learning to ignore things is one of the great paths to inner peace." - Robert Sawyer
"Do your own thinking independently. Be the chess player, not the chess piece." - Ralph Charell
"Genius is only a superior power of seeing." - John Ruskin
"I not only use all the brains that I have, but all I can borrow." - Woodrow Wilson
"Companies go out of business when they make the wrong decisions or, just as important, make too many decisions. The latter creates complexity." - Mike Maples

Comfort challenges:

1. Practice gazing into the eyes of others.
2. Learn to propose--stop asking for opinions and start proposing solutions.
3. Get phone numbers
4. Revisit the terrible twos--say "no" to all requests
5. Use the criticism sandwich
6. Find Yoda--call at least 1 potential superstar mentor per day for 3 days

Community Next Take-Aways: Slide.com and Meebo

Keith Rabois, VP Business Development, Slide.com

• Was involved with PayPal, Yelp, LinkedIn, and now Slide.com
• Common trait: original business model/idea was wrong
• Yelp: original idea was to spam friends with email on where to go to eat
• Try something, iterate until it works
• Start with value proposition, eventually people will find out about it
• YouTube, for example--didn't set out to be a video sharing site; people watched videos and cut and paste code into their email client (like Outlook); YouTube hit upon a consumer need (an easy way for people to keep in touch was to send something cool and interesting that they watched on YouTube)
• Most successful companies have an obsession with metrics--you won't be able to find out what's working until you have metrics
• Viral marketing is a way to hedge against strategy; if you don't know what your revenue model is, you have to acquire users cheaply; if your marginal cost of user acquisition (and user support) is $0.01, you should be able to generate more than $0.01 in revenue
• Only 3 successful types of Facebook apps: (1) intuitive judgment from recent college grads about product needs (e.g. free gifts), (2) widget makers (Rock You, Slide), (3) convert fully to focus on Facebook (iLike, Flixster)
• Yelp: paid reviewers in new cities to write reviews; only good if you can get the right people to do it, otherwise you don't inspire the right contributors later

Martin Green, VP Business Development, Meebo

• There is a difference between recruitment and retention
• Meebo focused on retention: delight and satisfy people who use the service
• Company mindset: wiki, forum, customer service--everyone in the company is on those
• Can't always predict what users want: most popular color was pink
• Who is the target user--get them in, show them mock-ups
• How do you get user feedback? Need to be them, or interview them all the time
• We have a short list of people we show stuff to. Tweak it until they say, "I would use that.
• Listen to how they describe things: "If you said it like this, I would use that."
• Get a 16-year-old to look at the product
• Like MySpace, does not emphasize Meebo marketing itself: "We want someone to send a message out inviting a friend to Meebo. We want this to happen through an actual person, not through our product."

CommunityNext Take-Aways: PBWiki

David Weekly, Founder and CEO of PBWiki

• Make it as easy as possible for people to put their unique information on your service
  
• Provide users/contributors with tools to share that information with others
• Let other people interact with/change the information that the user/contributor has shared
• Provide the user/contributor with updates on when his information has changed
• The web has matured: the relationships between 2 data objects was web 1.0 (hyperlinks); the relationships between 2 people was web 2.0 (social networks, UGC, sharing)
• But we still need a lot of maturity wrt relationships between people and data
• One fundamental need: How do I get alerts when information is changing?
• RSS helps, but it doesn't take care of filtering
• Facebook mini-feed is a step in that direction

CommunityNext Take-aways: MySpace and RockYou

Attended the CommunityNext conference today in Sunnyvale. Here are some of my key take-aways:

Jason Feffer, 3rd employee at MySpace

• 2 kinds of MySpace page creators: exhibitionists and marketers
• People like to be exhibitionists
• MySpace provided tools for these exhibitionists to bring other people in
• People would invite others to check out their MySpace page
• Only 1 year after launch did they think to give people their own URL
• 1 exhibitionist brings 5K-10K voyeurs
• Other type of creator: marketer
• Bands started to market themselves using MySpace

• MySpace became a tool for people to brand themselves
• It wasn't "come look at MySpace." It was "come look at me."
• They didn't stress MySpace--users infected others with themselves.

• "MySpace became a utility for people to infect others, and then we branded that utility."
• Brand was really important to MySpace--turned down opportunity to be promoted by a party in Vegas ("If we throw a party, it's our brand, it's our party, not someone else's"). Stayed in LA to project the brand of being media/entertainment company (not tech).

• MySpace was totally user focused. They hired people who used MySpace, who were part of the MySpace crowd.

• Jason's new venture: Sodahead. Way for people to create polls and embed rich media (videos, photos, etc.). It becomes a way for people to express themselves in polls.
• Created a polling widget that you can put on MySpace. Users can register for Sodahead directly from within MySpace.
• Marketing strategy--attach the poll to celebrities, leaders.
• Celebrity creates a poll, fans embed it within their MySpace pages

• Other MySpace marketing learnings: demi-celebrities were early users, they brought many other users with them. Get the hardcore users that attract others.
• YouTube, Photobucket were successful widget examples--people saw them at MySpace, wanted to use as well.
• Niche vertical targeting at MySpace--focus on vertical ("inch wide, mile deep")

Jia Shen, CTO and Founder, Rock You

Rock You is all about self-expression widgets
~14% penetration on MySpace, ~25% penetration on Facebook
43M uniques, 450K widgets/day; slideshows (100K/day)
14 people--never did any marketing

• The premise: you don't want to look like everyone else; you want to stand out, look cool
• Leverages people's desire to accessorize
• Self-expression (earrings, sticker on backpack)
• Rock You's first widget, slideshow, was created because there was no easy slideshow app created for the average user
• Existing method was very cumbersome, required some technical knowledge

Understand your user

• Know demographic (for Rock You, it's young non-technical female who wants to accessorize)
• Do market research (get magazines, hang out online [MySpace], see how people talk and interact)
• Do user studies--interview high school students every day

What's the use case

• Replace something existing (slideshow replaced existing marquee HTML process)
• Benefit of replacing something existing--users "totally get it"
• Study the MySpace page: 3 components
• About, interests, comments
• About--something really personalized, people spend average of 30 min creating slideshows
• Interests--not going to spend a lot of time, quickly create items (Flixster, quizzes)
• Comments--quick creation, have to be small (Rock You's "glitter text"--5-sec creation process)

Viral channels

• MySpace
• User bulletins
• In page profile: "That looks cool, how do I get my own?" Make the call to action obvious to the user. Users embedded a slideshow--was really cool, other users could create their own.
• Facebook
• Minifeed: in-profile experience less important; little icon must look really good. Call to action should be in the mini-feed.
• Invite: send to people who will actually convert over.

Founders at Work: Yahoo, del.icio.us

Take-aways from Tim Brady, 1st non-founding employee of Yahoo:

• Directory button on Netscape linked to Yahoo (for free)--"That was big. It sent our traffic through the roof."
• (Echos of Reid Hoffman's talk: in consumer web, it's distribution, distribution, distribution)
• (Distribution was how Excite got big)
• Thought of themselves as a media company, believed they could outsource search because "it was going to be a leapfrogging game. No one is ever going to be able to get so far ahead that we'd ever be in strategic risk of kingmaking a full-text search engine."
• Advice to someone founding a startup: "Know yourself. Try to do as much thinking up front as to what your breaking points are... Before I joined, I knew where the line was, when I would quit, at what point, and so when I was in the game, it never crossed my mind. I also knew why I was involved, what motivated me, and I didn't spend a lot of time perseverating on that stuff."

Take aways from Paul Graham, founder of Viaweb

• 2nd start-up after 1st one went nowhere: "We spent a lot of time trying to convince these people to use something they didn't want."
• 1st web-based software--"I was excited, because it meant we could start a company without having to learn Windows."
• Started Viaweb in July '95, had first demo in early August.
• "We felt like we had to have five or six customers to launch. And for these first customers, we basically would do whatever they said in order to get them as customers. We gave them the software for free for as long as they wanted. We built their sites ourselves."
• "If you're writing applications for end users, you have to remember that you're writing for an audience that has been traumatized by bad experiences. We worked hard to make Viaweb as easy as it could possibly be, and we had this confidence-building online demo where we walked people through using the software. That was what got us all the users... The other thing was, we had good graphic design. Our secret weapon was that we know that e-commerce was really about graphic design, not transaction processing."
• "It's never a deal till the money's in the bank... Before we ultimately got bought by Yahoo, we probably had nine or ten different acquirers that we were talking to, and things always went wrong for one reason or another."
• On raising money: "The advice I would give is to avoid it. I would say spend as little as you can, because every dollar of the investors' money you get will be taken out of your ass... The way not to have to raise money is not to spend money. Do everything as cheaply as you can."
• Advice for startup founder: "Make something people want. If you make something users want, they will be happy, and you can translate that happiness into money."

Take-aways from Joshua Schachter, founder of del.icio.us

• del.icio.us began as something Schachter built for himself--he needed a way to organize his collection of 20,000 bookmarks, and he hit on the idea of "tagging" them with brief text phrases to help him find links later
• For the first several years, Schachter worked on del.icio.us and other projects, like Memepool and GeoURL, while working as a quantitative analyst at Morgan Stanley. But all the while, del.icio.us was growing. By November 2004, a year after its release, it had 30,000 users
• Tried several different start-up ideas before del.icio.us worked
• Chose not to leave Morgan Stanley for a while because "the economics didn't make sense. It still made sense to keep the day job."
• Worked in many small increments: "I could be done for the day in 15 minutes. So if I could get one thing done a day, I was happy... So it moved pretty slowly. I worked on it for years."
• Why did del.icio.us succeed when many previous others failed: "First of all, because it was not a venture to start. I was building a product and that's it... I think in general being overcapitalized is a path to failure. The VCs want you to spend... I think the competitors had disappeared by then. The tagging thing was probably essential."
• On the invention of tagging: "There was no point at which I said, 'I'm inventing this wonderful new thing.' I just sort of realized that I had evolved my own filing system, and it worked for me. I'd used it for a long time before del.icio.us even showed up. This was the codification of that practice."
• On designing new features: "I think people ask for features--they want to do something, but they don't say, 'I want to do that something.' They translate it into some feature that typically they've seen somewhere else and ask for that instead... It turns out there's some better way to do that. So, stuff that people ask for, I tend to try and dig to the root cause, before reducing to practice."
• "Constraints breed creativity." (referring to having only 15 minutes/day to work on del.icio.us)
  

Principles of Influence: Robert Cialdini

Great (though a little dated) blog post on Robert Cialdini's principles of influence.

Key take-aways:

• Reciprocation. People are more willing to comply with requests (for favors, services, information, concessions, etc.) from those who have provided such things first.

• Commitment/Consistency. People are more willing to be moved in a particular direction if they see it as consistent with an existing commitment.

• Authority. People are more willing to follow the directions or recommendations of a communicator to whom they attribute relevant authority or expertise.

• Social Validation. People are more willing to take a recommended action if they see evidence that many others, especially similar others, are taking it.

• Scarcity. People find objects and opportunities more attractive to the degree that they are scarce, rare, or dwindling in availability.

• Liking/Friendship. People prefer to say yes to those they know and like.

How much funding does a startup need?

Great post from Marc Andreesen's blog: How much funding is too little? Too much?

Key take-aways:

How much money do you need in theory?

• Need enough money to get to PMF (product-market fit)
• Once you're past PMF, then you need enough money to fully exploit the opportunity

Risks of taking too little money

• May have unexpected setbacks (product release slips, competitor emerges, major customer loss, etc.)
• Funding window may not be open when you need money (startups from late '90s who raised money--like TellMe and OpenTable--are still around today, while their competitors ran out of cash)
  
• Global shock (e.g. terrorist attack)
  

Risks of taking too much money

• Dilution, loss of control
• Liquidation preference--raises the bar for how successful the company has to be
• Cultural corrosion

Cultural corrosion:

• Hiring too many people--slows everything down, makes it much harder to react and change
• Lazy mgmt culture
• Engineering team bloat
• Lack of focus on customers and products--easier to be completely focused on customers and products when you don't have a lot of money in the bank and you worry about the doors closing imminently
  
• Too many salespeople too soon--outselling a product that isn't quite ready yet, that hasn't achieved PMF--alienating early adopters and making it much harder to win them back when product is ready
• Product schedule slippage--what's the urgency? We have all this cash! Creating a golden opportunity for a smaller, scrappier competitor to emerge
  

Founders at Work: Blogger

Take-aways from interview with Evan Williams, founder of Blogger

• Evan Williams started Blogger by solving a personal problem: wrote his own script to turn his personal website into a blog.
• "The idea that I could have a thought and I could type in a form and it would be on my website in a matter of seconds completely transformed the experience. It was one of those things that, by automating the process, completely morphed what it was I was doing. If I could have a thought and then put it on my site, then obviously I am going to potentially do that much more and it is a stream for communication of a whole different type."
• "We took the script I wrote to publish my site, and we made an internal site where we could do the same thing."
  
• He learned from his first startup that it's important to focus--concentrate your efforts
• "One of the big lessons from my first company was to focus. After my first company died, I did an inventory of the projects I had worked on in the last year. There were something like 30 projects that I had started on and had not finished. My total weakness was not focusing on things."
• Blogger was initially designed for geeks. "It wasn't a mass consumer product... It didn't explode at first because it was fairly technical... You had to know a bunch of stuff, but things that you would know if you were a web geek."
• Blogger was not a technological breakthrough. "It wasn't based on any new technology. But that made sense to me because it was not that the technology was new, it was that we had figured out this medium, at least one of the native forms of what the Web was good for. It was about freshness and about frequency, and it was about the democratization of media and giving power to every body and the universal desire for personal expression and the attraction to a real, compelling personal voice."
• Started to run out of money in Jan. 2001 (almost 2 years after launching). Appealed to users of the product to send money to keep it running. They had such passionate users that they were able to raise $17,000.
  
• Everyone in the company left except for Evan. They went from $50K/month in payroll to $0.
  
• Stick to your guns: "One of the things that kills great things so often is compromise--letting people talk you out of what your gut is telling you. Not that I don't value people's input, but you have to have the strength to ignore it sometimes, too. If you feel really strongly, there might be something to that, and if you see something that other people don't see, it could be because it's that powerful and different. If everyone agrees, it's probably because you're not doing anything original." Reminds me of Reid Hoffman's advice: make accurate contrarian bets.
• Roll with the punches. Sometimes things that seem bad are actually a blessing in disguise. "Luck comes in many forms--and often looks bad at first. I always look back on the deals that we didn't do and the things that didn't work out, and realize what seemed like a bummer at the time was really lucky. Like the early acquisition opportunities. These obviously would have been really bad, as opposed to what happened later. Through that whole experience that's one of the biggest things I've taken away: if you have some plan and it doesn't go that way, roll with it. There's not way to know if it's good or bad until later, if ever."
• Simplicity is key. "I was surprised by the success of something so simple. That's a mantra for many people in the technology world--simplicity. But what we built wasn't that amazing. It was the idea of putting a couple of things together and being able to establish a lead by doing something really, really simple. How far you can get on a simply idea is amazing. I have a tendency to add more and more--the ideas always get too big to implement before they even get off the ground. Simplicity is powerful."