Elapsed Time

Does the bank own you, or do you own the bank? The continued codependency of Facebook & Zynga

noreply@blogger.com (Hunter Walk) — Thu, 17 May 2012 00:22:00 +0000

There's a saying "Owe the bank $1000 and they own you. Owe the bank $1 million and you own them." Basically that at high levels of indebtedness the bank becomes dependent on you - your default would be their demise. Sort of a "too big to fail" idea.

Facebook and Zynga find themselves in a similar situation. Despite having signed a mutually agreeable deal, they are both working furiously to try and reduce codependency. Zynga with a move towards mobile and Z-Cloud. Facebook by diversifying revenues. It's working somewhat - in early 2011 Zynga accounted for 19% of Facebook revenue, but by 2012 it was down to 15% (of course Facebook's growing total revenue also contributes to this percentage drop).

Still though, for a soon to be public company, one likely to trade at a very high P/E multiple, that's a big risk in a marketplace where missing earnings by a few cents can impact valuations. Both companies are well-managed, growth stories so my wondering here isn't about whether the bottom will fall out of either property in the near-term, but rather how Zynga thinks about the fact that Facebook is still so dependent on them in the nearterm.

I assume the partnership agreement they signed doesn't last in perpetuity - at some point it's up for renegotiation. At that stage Zynga actually still wants some leverage over Facebook, so they want to maintain some degree of revenue concentration. My guess is the current deal provides some MFN status with regards to not being treated differently in the social feed than other gaming companies. And I believe it has been reported that Facebook agreed to drive a certain amount of traffic to Zynga properties.

For Facebook, they need to minimize Zynga as a percentage of revenue while still relying upon the advertising and credits revenue stream to make quarterly numbers. So they care less about suppressing Zynga and more growing the non-games business in general, since growing games likely means growing Zynga. Is that bad for other game developers? Will Zynga not invest as much in gaming relationships during this next phase?

Of course the Machiavellian side of me imagines some large company like Tencent acquiring Zynga and doubling down on Facebook, not to maximize Zynga's value but to control Facebook. Pretty sure that if a public Facebook is getting 25%+ of its revenue from one source then you own the bank.

FIRST! Two sharing vectors for you to exploit.

noreply@blogger.com (Hunter Walk) — Wed, 16 May 2012 16:12:00 +0000

While most apps seem to focus enthusiastically on broadcasting what your friends have read, watched, etc there are two aspects of social discovery which today are being underexplored:

1) Tell me what my friends HAVEN'T seen yet
Various user research I've done suggests there's a sharing stigma around being last to the party - sharing something with a bunch of friends only to hear back "yeah saw that two days ago." Given this, I believe there's potential value in prompting me to share - generally or directed to certain people - with the call to action "Hey, probably hasn't seen this yet. Share with them?"

The mechanics of doing this are actually not that difficult if you have access as a first or third party to G+, Twitter or Facebook graphs. Here's one way it could work:

I'm reading an article on a tech blog and click +1 to share it to my G+ circles. In the publish confirmation box, I get suggested friends to add specifically to the share, based on (i) Google's knowledge of their interests & (ii) Google knowing that they haven't seen this URL yet via search/email/reader/G+/etc.

2) Which of my friends was FIRST to see it
Anyone who isn't a n00b knows what FIRST! means but yet none of these social sharing systems do a very good job of rewarding the initial curator. Who was the first of my friends to watch the video that later went viral? Which person I follow was first to tweet out the link to that amazing blog post? Who listened to that cool band before they went big time?

The ability to identify curators as trendspotters is pretty valuable generally and to be known among your friends as the one who got there early, major clout (if not Klout).

Again, not that hard to do within a closed system. Twitter could certainly do this - for a given link I share or see, who was the first of the people I follow to tweet it, or I could pivot to see who were the first people to tweet it overall (you'd run into the self-promotion issue there as the author is likely the first to tweet, but perhaps still valuable).

What one decision would Yahoo want to redo?

noreply@blogger.com (Hunter Walk) — Mon, 14 May 2012 00:30:00 +0000

View the story "Yahoo: What one decision would they want to go back and redo?" on Storify

Peter Dinklage on Luck

noreply@blogger.com (Hunter Walk) — Fri, 11 May 2012 06:01:00 +0000

Peter Dinklage (Tyrion on Game of Thones) on role of luck in NYTimes:

“I feel really lucky,” he said, then added, “although I hate that word — ‘lucky.’ ” When I asked him why, he mulled it over for a moment, looking away. Then he focused back on me. “It cheapens a lot of hard work,” he said. “Living in Brooklyn in an apartment without any heat and paying for dinner at the bodega with dimes — I don’t think I felt myself lucky back then. Doing plays for 50 bucks and trying to be true to myself as an” — here he put on a faux snooty voice — “artist and turning down commercials where they wanted a leprechaun. Saying I was lucky negates the hard work I put in and spits on that guy who’s freezing his ass off back in Brooklyn. So I won’t say I’m lucky. I’m fortunate enough to find or attract very talented people. For some reason I found them, and they found me.”

The most overused words in tech?

noreply@blogger.com (Hunter Walk) — Wed, 09 May 2012 04:55:00 +0000

Can Online Video Usher in a New Age of Empathy?

noreply@blogger.com (Hunter Walk) — Wed, 09 May 2012 01:37:00 +0000

Here's an article I published on Fast Company's Co.Exist site today: Can Online Video Usher in a New Age of Empathy?

tldr: the worldwide availability of media on YouTube is helping to create a new type of global citizen whereas we've previously been separated by differences in religion, nationality, politics.

Beating the market using sentiment analysis of Internet product reviews

noreply@blogger.com (Hunter Walk) — Tue, 08 May 2012 03:42:00 +0000

Wow, a sample portfolio investing in companies based on sentiment in web user generated product reviews outperformed the market by 8% over a period of four years.

NBA Players Who Touch Each Other Win More Frequently

noreply@blogger.com (Hunter Walk) — Sat, 05 May 2012 15:22:00 +0000

The Power of the Bro Hug in the NBA from a study on physical contact between players!

1. Players who touched their teammates more had higher "Win scores," defined as "a performance measure that accounts for the positive impact a player has on his team's success (rebounds, points, assists, blocks, steals) while also accounting for the amount of the team's possessions that player uses (turnovers, shot attempts). "

2. Teams where players touched teammates more also enjoyed significantly superior team performance than those where players touch teammates less (the authors used a more complicated measure of team performance than win-loss record, it took into account multiple factors like scoring efficiency and assists, and other measures, which correlated .84 with the number of wins that season.

3. The authors present further analyses suggesting that the increased cooperation among teams where players engage in more "fist bumps, high fives, chest bumps, leaping shoulder bumps, chest punches, head slaps, head grabs, low fives, high tens, full hugs, half hugs, and team huddles" explain why touching is linked to individual and team performance.

-"Tactile Communication, Cooperation, and Performance: An Ethological Study of the NBA"

Twitter, Instagram & the Challenges of Discovery Outside the Feed

noreply@blogger.com (Hunter Walk) — Tue, 01 May 2012 03:31:00 +0000

My tweet "QQ: do you ever click the 'popular' tab on Instagram or 'discover' on Twitter? Why or why not?" got a bunch of responses, so at a few people's request, here are the summarized tweets on Storify, grouped by "Yes on Instagram," "Yes on Twitter" and "Hells No." Given my own experiences, the fact most people picked "Hells No" didn't surprise me. There are much longer posts to be written about the challenges of designing de-personalized discovery within a curated feed based experience but here are a few thoughts:

Generally I'd say there are three ways to think about content which interests you, and it's VERY VERY HARD to do all three of these in the same product

What you like (high relevance, high personalization; done either via algorithmic recommendations or your own curation)
What your friends like (mixed relevance from an interest graph perspective but important because the content tells you about your friends and serves as social glue for those relationships)
What the world likes (the watercooler, mixed relevance but important again because overall enjoyment of content isn't just about the content itself, but the community which forms around it. You don't want to be left out)

Feeds are especially challenging UX for this because they are inherently linear while browsing is inherently multidimensional - you want to be able to zoom in/out on topics, and feeds don't really support that elegantly.
In Twitter, Instagram we've already created a feed based product which smashes together the three categories above (i'd guess that many people follow friends, sources of info they like, and one or two breaking news style services whether it be CNN, ESPN, pop culture, etc). So anything you leave out is likely to be less relevant to you - ie if something is on Discover but not in your feed, it's a failure of your curation, not the system helping you explore new areas of interest previously unknown to you.
Lots of services try to put in popular, what's hot, etc and I'm guessing it's mostly for the following purposes:

To get you to discovery new content & sources (see comment above about why this are inherently less relevant)
To give people with thin low volume feeds something to do so that there's always new content a click away - solving the "I'm Bored" problem
My argument would be that more UIs should be explored which allow you to easily pivot into these categories from your main feed as opposed to separate tab. For example, from a tweet in my feed, easily swipe to "similar tweets" or "more tweets about this topic." And there can be an affordance that if your main feed is empty, fills it in with best guess popular stuff. Note I don't like interweaving popular content with your own curated results, it's jarring.

Finally, these sorts of browse experience are major spam vectors. Twitter says they're pushing something out next week to solve this but what I'd really love in the Twitter mobile app is the chance to replace Discover with Flipboard or ReadItLater, either of which would be excellent products to mimic/acquire.

Ok, bunch of random thoughts based on what I read from results. Were you surprised by people's responses? Do they match your own behaviors?

Queen of England on Challenges of New Technology

noreply@blogger.com (Hunter Walk) — Sun, 29 Apr 2012 04:02:00 +0000

"I very much hope that this new medium will make my Christmas message more personal and direct... just another examples of the speed at which things are changing all around us. Because of these changes I'm not surprised that many people feel lost and unable to decide what to hold on to and what to discard. How to take advantage of a new life without losing the best of the old"

- Queen of England, talking not about the Internet or smart phones, but in 1957 discussing the disorienting effect of television during her first televised Christmas speech.

"Instagram for Video"

noreply@blogger.com (Hunter Walk) — Sat, 28 Apr 2012 00:29:00 +0000

Ok, I usually don't write about video other than commenting on YouTube because (a) I'm inherently biased and (b) I don't want my opinions to be taken as representing the view of my company. But.... since there's so much heat around the question of "Instagram for video" right now, here's a quick thought on why photos and videos are very different.

Think about the photos you look at in either your social feeds or specific photos sites: 99% of them interest you because the subject(s) and/or camera holder is someone you know (or you yourself). Because pictures are static, you can also grok and scan them very quickly, meaning the "cost" of a bad picture is low, hence you are interested in pictures from a wider variety of friends. The other 1% of pictures are not interesting to you because of the subject matter (flowers! eagles! antique doorknobs!). Various products are changing this split but I really don't think it gets past 90/10. [Of course there are photo buffs who just love to spend hours on Flickr browsing hashtags but that's not what's driving Socialcam and Viddy installs. And I'm not talking about photos which are incidentally included in news stories - eg the Tebow picture you see when you go to espn.com]

Now, about videos. It's the other way around. In 99% of the videos you watch you don't know anyone in the frame. You watch because the subject is interesting (and if it isn't, you bail pretty quickly). Why? Because there's a much higher cost to watching a video. Of course hours of video are consumed every day, so I'm not saying people won't watch videos, I'm saying the "social" in video is more about the subject and then sharing or discussing it with friends. Think of it this way, the average video has ~24 frames per second, each of those is a "picture" - i don't mind seeing a single picture of my friend and his baby in my Facebook stream, but I wouldn't want several thousand in a sequential slideshow. That's what a video is. Again, various technology and products are moving this from 1/99 --> 10/90 but I don't believe this fundamentally means I want to see more personal video from a broader range of friends.

Note: at mobile scale, 10% of the "video" market is still HUGE so I'm not saying that any of these apps are necessarily flashes in the pan. I don't know how to explain their recent spike, although I believe it has much more to do with Facebook distribution/feed changes than an inherently viral nature of personal mobile video creation or in-product network effects.

Off the cuff thoughts - where am I wrong?

The PreMortem: Preventing Failure Before You Fail

noreply@blogger.com (Hunter Walk) — Mon, 23 Apr 2012 05:37:00 +0000

People sure seem to love themselves a good postmortem. A time as an individual or team to look back on what went wrong and learn from mistakes. To then share these learnings so that others can avoid your missteps. But what if failure could be addressed not by looking backward but by looking forward? What if the premortem was more common?

When kicking off a project, how often do you really honestly have a discussion about what could go wrong? Not in the context of the pros and cons of various scenarios or strategies but once a path is decided, what would prevent you from accomplishing these intended tasks?

Components of a Good Premortem
1) Defined project goal and scope: it does no good to discuss a moving target.

2) Core team members present/participating: it doesn't need to be the full team (although it could be), but you need to get beyond just the one or two project leads and down to all the people who have responsibility for meaningful work items. Also be sure to include people from other teams who are major dependencies.

3) Trust: You're basically asking people at the start of a project to suggest "why they'd fail" -- if your culture is one of puffed chests, you need to ensure people understand this is meant to be productive and open. And should involve both professional and personal concerns. For example, if a key team member has a sick parent or is expecting a child, these are very real needs that may impact their ability to contribute during certain stretches.

4) Buddy system solutions: Getting someone to identify an potential issue is a first step, but then you need to make sure to track the concern through the life of the project. Even potential "failure points" that have been resolved should be periodically reviewed -- the dead sometimes don't stay buried. Also helps to have folks look after issues which aren't always in their core area - this way they're more objective and can help the functional owner get out of the weeds.

By avoiding traps of overconfidence at the start of projects and creating an environment where team members can productively agree on the strategy, but express concerns about execution, perhaps organizations can reduce the number of failures.

Amazon Offers Me Money to NOT Use Prime

noreply@blogger.com (Hunter Walk) — Sun, 15 Apr 2012 04:33:00 +0000

Hmm, Amazon is offering me a dollar of MP3 Store credit to *NOT* use the two-day shipping I get for free as part of Prime. Wonder if this is a test or my order behavior triggered this? Some thoughts:

1. Acquisition of Digital Users
Amazon has used "$1 to spend on MP3s" before as a promotion accompanying the purchase of CDs. They're clearly trying to drive usage of their digital downloads especially now that Kindle Fire is closely tied to their music, video and ebook strategy. Part of this could be just customer acquisition except I've already purchased Amazon MP3s in the past [but don't own a Kindle], so this would be more about reactivating me rather than introducing me to this product area.

2. It's Not a Real Dollar
It's not a real dollar in the sense that they only have to pay the record label's portion of the purchase, so the dollars they are giving me only costs them the wholesale price.

3. Shipping is Expensive
Especially with the new baby I've been ordering a ton of low margin items on Amazon Prime. I've often wondered whether shipping on, for example, a box of formula leaves them any profit. Perhaps this is an indication that certain usage patterns of Amazon Prime actually make me a net loss to their bottom line despite my incredible order volume.

Has anyone else seen this? Have they been doing it for a while?

LinkedIn for Mentorship Matching

noreply@blogger.com (Hunter Walk) — Sat, 14 Apr 2012 20:45:00 +0000

Why doesn't LinkedIn have a "Mentorship" box in their "Opportunity Preferences" which lets professionals express that they're open to helping students/young professional with career advice/decisions. And if this was checked, a mentee would be able to InMail the potential mentor without needing a premium account. Prevent abuse by allowing mentor to mark a mentee request as spam, in which case the individual is blocked from participating in the mentorship program.

The opportunity here is that many kids lack professional role models so let's do a better job of matching them with advisors, even if it's just a virtual relationship.

LI could also decide to make mentorship one of the attributes they care about, and give people the option of adding this as an accomplishments field to their profile based on double opt-in disclosure of "Person X menteed Person Y."

Meg, Jeff - this would be a great LinkedIn For Good project, no?

Howard Schultz of Starbucks. Always Inspiring.

noreply@blogger.com (Hunter Walk) — Sat, 14 Apr 2012 06:10:00 +0000

From Fast Company:

"Schultz tends to see his company’s recent tribulations as a case study in what can happen to a business that uses growth as a strategy rather than a tactic. For the better part of 15 years, he explains, from 1992 through 2006, "practically everything the company did produced a level of success and adulation." Yet Starbucks’s consistent successes distorted its managers’ view of their own creativity. As he puts it: "If Frappuccino is a hot category and you introduce a new flavor, and it moves the needle a lot, the organization comes to believe, 'That was a great thing we did.' And it imprints a feeling of, 'That was innovation.' But that’s not innovation. In fact, it’s laziness." The line extension of a product, by Schultz’s criteria, involves little in the way of risk taking or long-range vision. And that was the problem with the old Starbucks."

1% Of Nothing is Something (How AngelList Can 100x Startup Philanthropy)

noreply@blogger.com (Hunter Walk) — Thu, 12 Apr 2012 05:23:00 +0000

Update: On Friday 13th I joined the Board of 1% of Nothing, the nonprofit mentioned below. At the time this post was published, I had no affiliation other than being very fond of the idea and team.

My desire to see LinkedIn add "Biggest Mistakes" to their resume template is about defaults. Default settings (let's broadly define as what a user encounters native to a system), are really significant because they often remain unchanged and also signal the environmental norms. What does the community you are joining expect of you? And I firmly believe that norms are more important than laws when trying to impact behavior change. In response to my post, LinkedIn CEO Jeff Weiner replied: "Think the sentiment is spot on. Have always thought some of the most valuable career lessons I've learned are what not to do."

So time to pick on another influential service: AngelList :)

AngelList's impact on early stage investing can't be underestimated - it has been one of the forces creating tremendous funding velocity in the marketplace. Because of this, their company template has become something which doesn't just record information, but shapes it. Their tabs and fields instruct founders what data they need to supply in order to "fit" into the community. For example, I might suggest that the prominence of their Advisor section has promoted the concept and value of an Advisory Board beyond it's previous import.

So this got me thinking. My friends Shervin & Matt created 1% of Nothing which promotes early stage philanthropy - the idea that becoming charitable isn't something you do after the IPO, but rather at founding by setting aside 1% of your equity for a cause. It's great and they've had some early success.

But the real opportunity is to make this the behavior of entrepreneurs everywhere. Make it the default, so that founders are actually opting out, rather than opting in. One approach might be to get it written into the standard early stage funding docs, so that it actually needs to be removed rather than added. But another powerful and public way would be to add it as a field to the AngelList company profile. Did this startup commit 1% and to what organization?

Boom! Overnight this becomes a piece of data that investors will review. The decision - to fund or not, and to what organization - turns into another part of the conversation, one which sheds some light on the heart and passion of the founders. And if it turns out to be a positive signal, well, one might actually find that companies which commit to philanthropy early on outperform those which don't - essentially meaning the 1% dilution pays for itself.

And not just for funders but for employees - it becomes visible whether the startup you join is charitable at its core. With the tight competition for talent I can imagine this would be another selling point for potential hires. So Nivi, Naval, whatcha think?

Mistakes Matter Too: Why We Should Share Our Failures, Not Just Our Successes

noreply@blogger.com (Hunter Walk) — Wed, 11 Apr 2012 14:13:00 +0000

Let's judge people not just by their successes but by their best screwups too. Or at least that's what I proposed a few years back to Google HR -- that Googlers add "My Biggest Mistake" to their Google Resume (the Google Resume being an internal accomplishments CV that employees maintained primarily for purposes of promotion reviews. It has since largely been replaced by other evaluation templates). Larry Page believes audacious goals are the only ones worth going after because even if you fail, you've likely made more of a difference than completing easier tasks. So why not call out those failures and their associated lessons? Here was my rationale:

Learning organizations embrace failure in addition to success. Negative examples are cited often in the culture of military and health care, where admitting mistakes kills a career and even opens you up to liability. While reading about this toxicity I became concerned that Google was suffering a bit from the "we're all A Students" problem. Google Resumes were lovingly manicured and groomed to impress reviewers - everyone was so successful! Sure the occasional post-mortem was conducted if something really went wrong, but these were isolated to the team + their management, and rarely attached to an individual (other than those who in the cover of darkness received low performance reviews and were encourage to find another project). Yes, maybe some of the learnings were folded back into our company-wide processes and thus everyone benefits, but there was no way to browse this valuable information, or to ID the battle-scarred individuals for deeper introspection through 1:1 chat.

On top of this halcyon view of ourselves, we were actually filled with folks who had just crazy amazing backgrounds. Like, "See that dude, he invented Python." Holy shit, that can be kind of intimidating when you start to think everyone around is a perfect supergenius. I find that even when you respect someone it's humanizing to know that, yes, they screw up too sometimes. That's why events such as FailCon have gotten a momentum in the tech community.

Also, Google was in a general hypergrowth period from a headcount perspective which means norms & defaults are very important as signals of what matters in a culture. Without those, you lose the fabric. Culture frays. So I did something strange: I added "Biggest Mistakes & Lessons Learned" section to my resume and outlined three times I f'ed up.

Then it started spreading - pinged a few folks I knew and asked them to add it. And they asked a few more. I suggested it on the company wide Ideas@ list. It wasn't like it "went viral," but if I recall correctly a few dozen folks made the addition to their Google Resume, which was cool. With this minor success in hand I began a campaign to make it an official part of the Google Resume template. You see, defaults matter. Think about the forms you fill out - those boxes make a difference. They signal to you what's important. What's expected of you. Norms > rules.

Unfortunately I kind of got the brush off and it was suggested that I just continue the grassroots effort. Now, this isn't a knock on our HR team - we have one of the most progressive - and aggressive - people operations groups out there. I have been impressed with their analytic thinking and ability to get stuff done. I just think they were wrong on this one :)

Although Google has maintained a strong culture, I still believe there's opportunity to help share our mistakes internally - and externally - in order to accelerate the cycles of innovation. Let's not make the same error twice is a powerful goal. But actually now I'm thinking even larger than Google's internal resumes. Hey LinkedIn, how about making "Mistakes" a default field on your Profiles?

[related: Kudos to the entrepreneurs who write great postmortems on their companies. Tremendous balls to stand up and say "here's what we/I could have done better" but you are contributing to the ecosystem in a big way]

Sports Leagues Need to Own The 2nd Screen

noreply@blogger.com (Hunter Walk) — Mon, 09 Apr 2012 03:40:00 +0000

Twitter abuzz today about the quality of The Master iPad app. MG Siegler calls it representative of the future of television. These second screens give an amazing opportunity for the sports leagues and teams themselves to own the fan relationship while selling off broadcast rights for big dollars. By creating the best complementary experience to television, the sports league can avoid being disintermediated by the broadcaster. They'll know who is at the other end of the tv. They'll maintain this relationship regardless of who buys the tv rights. And if they want to go direct-to-consumer at a later date, this gives the installed base.

If I were running the digital arm of ANY sports organization (or even potentially teams), I'd make sure we had the best iPad app out there for our sport. Just like MLB has done.

1:10:100 - how to scale a new product

noreply@blogger.com (Hunter Walk) — Tue, 03 Apr 2012 03:58:00 +0000

When working on new products, here's one hack I've used to avoid over-architecting for scale in the early stages but keeping teams focused on same goal. Shorthand is 1:10:100

1: Do the minimum work involved to pilot the product in its most minimal form, supporting it manually or in a manner that wouldn't be economically sustainable at scale. Use this phase to test your key assumptions. Example might be a pilot with one organization, or a week long beta with actual users.

10: Identify the minimum additional work that needs to be done in order to scale up an order of magnitude from before. 10x more users, 10x more availability, 10x more clicks - whatever. Here you are testing to make sure the data you saw before holds. And understanding what parts of your technology/process/system break at this increased load.

100: Consider this steady state. What has to occur between 10 and 100 to support ongoing operations. It doesn't necessarily mean full launch. For example, you might still decide to launch only to a particular customer segment or in a particular country. But it does mean that you're pretty close to a product and process which scales repeatedly with demand or opportunity.

There's nothing revolutionary about 1:10:100 thinking but I find that have an easy and simple way to describe moving from a manual test to a scalable product helps when defining goals and communicating across teams.

Are there other ways you've helped your teams understand the process of scaling?

Bump Billboard in SF: Explained!

noreply@blogger.com (Hunter Walk) — Tue, 20 Mar 2012 05:47:00 +0000

So every day on my way to SF i see the billboard promoting Bump. Their 80 million user number is quite compelling but the graph always confused me. I figured it was just standard 'clip art' and wondered why they'd show a choppy curve - ie if this is supposed to be a user graph (as it suggests) what are those dips - why were there periods of inactivity. It seemed like a poor graphic choice.

However founder/CEO David Lieb helpfully let me know via Jig that he believes in fact it's drawn from real Bump data.

via David: "it's actually real data in the graph. number of items shared via Bump per week I think."

So the question has been answered! And all I'm left wondering is why they used "number of items shared per week" instead of total users to depict their growth cleanly.

Crowdfunding Becomes Crowdbuying: Why Kickstarter Will Power the Maker Economy

noreply@blogger.com (Hunter Walk) — Mon, 19 Mar 2012 16:28:00 +0000

You probably know Kickstarter as a crowdfunding tool built by a New York-based startup. Members can list creative projects in areas such as publishing, technology, film, and then gather funding from the masses, in amounts as small a dollar up to commitments of thousands. Last year the Kickstarter community pledged $150 million, which makes them a considerable tool to bring your idea to life. I've sponsored several myself, for example, one focused on photographic Mexican Lucha Libre wrestlers.

However to see Kickstarter as "just" a funding platform is actually too narrow. It's a system based on (a) being able to give money directly to a creator, not a corporation or middleman and (b) becoming part of the creator's community in the process. Tapping into the powerful collaborative action of "we're making this happen together," no way limits their ability to expand into content that's already been created, manufactured, or distributed. And as you consider the technology and economy changes occurring at a macro level - creators being able to go directly to consumers - Kickstarter has a chance to be something unique. Not just a payment system (today they just sit on top of Amazon Payments), but by tapping into data, emotion and community.

Four Reasons Kickstarter Will Power the Maker Economy

1) Crowdfunding Grows Because Corporations Cease Being a Primary Source of Capital for Creatives: We've entered an astounding period for creatives and entrepreneurial individuals. Never has it been easier to bring your writing, music, video, product, app to market. And the necessity to become an economic actor is driven partially by the decline of establishment - traditional employers of creatives are suffering (publishing, media, record labels). What does this mean? Few upfront dollars for creatives, especially if they are unproven or want to try something "risky."

Fortunately for many types of creation, the costs of production have decreased even faster. Predominantly due to technology advances (bandwidth, prosumer tools, shift from atoms to bits) and the creation of global marketplaces, it's never been easier to try and develop an audience or customer base. Whereas niche businesses were once dependent upon the density of cities or domestic mailorder, now you can find your community from across the world. Crowdfunding is simply asking these people to pay upfront. And when you're of a niche, your desires are usually undermet by traditional production, which means you are more likely to commit dollars in advance. Hence, the rise of crowdfunding.

2) Unbundling of Creators & Rise of the "Businesses of One:"

While disruptive to many, we're discovering that this unbundling has real financial benefits for makers who can cultivate a following. Consumers are more willing to pay when their money is going directly to a person. We hate paying corporations but we like paying creators. And of course when there's no middleman, the creator can yield higher profit even if they sell fewer or at a lower price. And when you pay a creator it's not a single one-off exchange of dollars for a good or service, it's a relationship. It's more like patronage - you are a supporter of a person's work and voting with your dollars.

Kickstarter has nailed the feeling that you are paying a person to work on a project of mutual passion, not just transacting. The story behind the item, the updates from the creators, the selection of what level you want to pay along with rewards -- these are all queues that you are sending your money to an actual human being who has worked hard on something.

I see no reason why this model can't evolve to be a front-end for selling what's already been created, not just raising money. It's the evolution of the tip jar, the subscription model, etc. I can read a post from a blogger I like and support her in a way that brings me closer. That makes me a supporter who starts interacting with her and other supporters. Not just a passive reader. I can buy a live concert recording from a band I like and it feels much more vibrant than just clicking a PayPal link. It's an emotional wrapper to what's otherwise a very mechanical interaction. And it forces creators to improve the way they interact with their purchasers.

Kickstarter can be the point of sale for the creative economy and increase sales conversion rates compared to simple checkout buttons.

3) True Social Commerce Means You Don't Have to Pay Me to Share: I don't need "$10 credit" promotions to share Kickstarter projects with my friends. "Three friends buy and yours is free" means nothing to me in the context of projects and creators care about. Kickstarter's language personifies the transaction - I'm "funding" a "project" and becoming a "backer" who will receive "updates" from the creator. Contrast this with pre-ordering a CD and becoming a customer who will receive emails from the store. Feels different, right? If above I argue that Kickstarter will increase conversions/donations, I believe they also will increase passalong, potentially with a system that shows how many "backers" you attracted. And in this case the compensation won't be an affiliate fee, but rather just access to, and thanks from, the project creator.

Increased conversion rate + increased sharing

4) Yielding a Purchase Graph to Improve Discovery: Social graph, interest graph, location graph, graph paper, no wait, not that last one. These are all just fancy ways of saying "data on something and its relationship to other things." Kickstarter's purchase graph means they know what you have supported or bought in the past. And we know that "bought" beats "liked" in terms of true intent. With enough transaction volume Kickstarter should be able to cross-market effectively, which again leads to an ability to drive demand. You sell more when you sell via Kickstarter.

Why do you think eBay bought Hunch? Because Paypal data + Hunch = better product recommendations. Same with Amazon Payments + Amazon. Owning transaction platform providers gives you tremendous insight into individual purchases and preferences. And Kickstarter data is already public ("Backers") since the social recognition is part of the experience.

Plus unlike eBay and Amazon, Kickstarter has the chance to also be a content destination for its community. "Updates" and "Comments" already provide a basic discussion and marketing framework for an item's creator and their fans. While Amazon allows, for example, author's to talk about their product and interact with reviewers, it's just another small item on their overcrowded product page. It's not a loving and warm space owned by the creator. Kickstarter is.

Beyond the on-site experience, I could choose to share my purchase data by authing my Kickstarter account to other products. Personalization gets better because what I bought is a strong signal. People discovery gets better because the fact you and I both bought London Calling by the Clash is now known. And oh look, they already provide simple profile based summaries of what I care about:

Increased item conversion rate + increased sharing + increased discovery = the Kickstarter advantage for the creative economy.

If you believe in the unbundling of creatives from corporations. If you believe that consumers will seek out relationships with creators and vote with your wallets. And if you believe communities will form around creators, goods and content, well, then it's not a stretch to believe that Kickstarter will be one of the most important platforms for commerce, and a fundamental catalyst of the ideas economy.

License to Drive: Will Computerized Vehicles Speed Us Towards a Predictive Model for Driver Behavior?

noreply@blogger.com (Hunter Walk) — Mon, 05 Mar 2012 04:54:00 +0000

California joining Nevada with frameworks for allowing driverless cars on the state's roads got me thinking about how this all evolves. My assumption is that driverless car safety increases as the density of driverless cars increase. That is to say, when we're 100% driverless cars there should rarely be any accidents because the cars can coordinate with one another to prevent such mishaps. However up until that point, the driverless car OS needs to reactively deal with human drivers in other cars which leaves a lot more room for the unknown.

The onboard computer needs to account for other cars it believes could cause an accident. The most basic part of this is reactive to an immediate threat -- a car cuts you off or breaks suddenly and your car needs to stop suddenly less it hit the other vehicle. The next wave of intelligence emerges from analyzing available realtime information from the car's proximity to anticipate potential threats. A speeding car coming up on the left could cause your car to push to the right hand side of its lane, giving a few extra inches to the passing auto. We probably do things like this unconsciously while driving and the computer needs this sort of AI too. But what if we could go beyond what a driver was doing right now and understand the history of how he drives generally or reacts in certain situations. Then the computer could create a predictive model of what was likely to happen given the specific drivers (well, vehicles) on the road around them at any time. A database of intention for cars instead of people.

Here's how it could work: the driverless cars basically pass data back and forth and into a centralized db. Imagine that a driverless car is at all times gathering information about the cars around itself. Additionally it's using OCR to identify cars by license plate and record information about those vehicles - speed, distance it keeps from other cars and so on. You can essentially build a compendium of driving habits by car using license plat as the unique identifier. For example, your driverless car "sees" that plate number CSR4408 just pulled 20 feet behind you. It does a lookup into the car database and find that this driver is very aggressive, which increases the chance of an accident. So your car moves one lane over and lets it pass rather than risk a tailgater.

Would there be privacy implications here? Certainly you are allowed to observe other drivers and make judgments about their safety. Our car's software today is able to gather enough information about your historical speeds to already fill in some of this information. Of course some cars are driven by more than once person but unless you start doing facial recognition too, one would assume the fingerprint would match the car and not the driver. When a car is sold, the record would be cleared & restarted since there's a different driver (this wouldn't be a problem since car sales are recorded with the DMV as change of ownership). And I guess opting out means obscuring your license plate :)

[I should note that although I work for Google, I have no knowledge of our driverless car project outside of what has been discussed publicly and the speculation above is merely forward looking]

#UncensoredBook now free to all EFF supporters

noreply@blogger.com (Hunter Walk) — Sun, 04 Mar 2012 03:44:00 +0000

Great news to share. In January Eric Ries and I curated an ebook called Uncensored to benefit the Electronic Frontier Foundation, a nonprofit organization which defends digital rights. The book features blog posts from notable technologists such as Fred Wilson, Brad Feld, danah boyd, Marc Andreessen and dozens of other big thinking folks. While you can continue to purchase the book by itself - and 100% of proceeds are donated to the EFF - I'm excited to let you know that we've worked to make the ebook one of the perks you can get for free when you become an EFF member! So go over to their site and join today.

We're honored that the EFF found our project valuable enough to embrace in this manner.

Good Eggs: How a 2007 brunch led to my investment in Karma Science

noreply@blogger.com (Hunter Walk) — Sat, 03 Mar 2012 03:15:00 +0000

Update 5/18/12: Karma has been acquired by Facebook. Congratulations to the team and thanks for the opportunity to help support you!

You ever meet someone and wonder if you could get away with kidnapping them, locking them in your basement and exploiting their incredible intelligence to your sole gain? Yeah, me neither. But IF I did think that way, Lee Linden would be shackled right now to my water heater. Since that would be, you know, illegal, I'm settling for being an angel investor in his newest company Karma, alongside folks like Kleiner Perkins, Sequoia, Obvious and others. Karma's app is one of the smartest "mobile social commerce" experiences I've seen and many many many journalists seem to agree. It's an example of my "anthropology + algorithm" thesis - that the best consumer technology uses science wrapped in art to delight users. In this case it's rethinking what gifting looks like in a way which creates tremendous emotional satisfaction for the giver and recipient.

But as suggested above, it's not just the product I loved, it's the founders Lee and Ben Lewis. Ben used to work at Google and I tried to recruit him over to YouTube a few years back. He declined, letting me know he was actually leaving to join a friend in starting a new company. That friend was Lee Linden and the company was Tapjoy, which enjoyed a very successful exit in 2010. I'm thrilled to finally get to work with Ben, even if it's not in the capacity I originally expected.

Lee and I first met in 2007 at a Stanford brunch. He was a first year grad student and I was an alum returning for a mentorship brunch. If I remember correctly, Lee's mentor didn't show and we hit it off big time. Getting together for coffee or lunch every so often, I discovered that in addition to Lee's raw horsepower, he's incredibly modest. So this is a guy who began his post-undergrad career as a star product recruit at Microsoft, then came out to the Valley and within a few years got a graduate degree, launched a Y Combinator startup, built a hit iOS game, built an ad solution for that game, turned that ad solution into a company and sold that company. Oh and did I mention he also worked with Kleiner Perkins as well as some other early stage investing work? Yeah, he's fundable.

So when the opportunity appeared to help lend my support to their latest venture, it was with head and heart that I enthusiastically committed. Thank you Ben and Lee for saving me a seat on this bus. Full speed ahead!

"I'd Give It a Good Review but Then It Would Get Crowded:" How airbnb, vrbo, etc should evolve their user review incentives

noreply@blogger.com (Hunter Walk) — Fri, 02 Mar 2012 05:23:00 +0000

We recently rented an amazing VRBO place here in the city for visiting family. Did I supply a favorable review? And risk the place getting too popular? No way!

Unlike reviewing a restaurant or hotel where a handful of good reviews aren't going to impact overall availability (many good reviews might), supply constrained goods & services can often book up on much low volumes. This seems most common with short-term rentals -- I've had a few friends tell me they intend to keep private lists of great airbnb apartments to only share with friends.

But since these services need reviews as a signal to help consumers, what are some product solutions to this "review reluctance"?

1. At the listing level, show me distribution graph of repeat renters

Flowery glowing reviews are nice to give specific context but often I want one piece of information: how many people who stayed there before would stay there again? Since these services know renter info they can actually report how many consumers returned to a location. They also know whether you came back to the same city and decided to stay somewhere else even though your previous rental was available. This can be turned into useful information without the renter's input since it's anonymous.

2. Let renters put specific customers on VIP list which providers early window for booking or auto-waitlist

Another approach is to deal with the concern of the reviewer - that their good reviews will make it more difficult to get into their favorite properties. Property owners could categorize certain customer accounts as VIPs and grant them earlier booking window, auto-waitlist for cancellations, etc. Basically any way for the renter (who wants good reviews from satisfied customers) to help unfreeze the review process.

3. The companies themselves can provide incentives for reviews

Since reviews = more bookings, it's actually in the service's interest to get users to review - both good and bad. Accordingly they can provide system level benefits for giving reviews -- discounts, loyalty program, etc.