This Saturday, Techcrunch will be bringing the Disrupt hackathon back to the Big Apple. With over 500 hackers likely to attend, this proves to be one of the biggest hacking events in New York. But as a participant, what should you expect? And as a tech industry observer, why should you be paying attention?

As a Disrupt hackathon veteran, let me help explain what these are all about.

Deciding What to Hack
Choosing what to work on is more an art form then a science. Some people wait until they get there to make a decision. Some teams are formed the day of the event, and may toss around concepts for hours before they get to work. Others know exactly what they want to build and hit the ground running right away.

Then there are attendees who have plans to use the hackathon as a platform to launch their startups, having really built and tested their product well beforehand. In fact, during the first NYC hackathon, one Sunday morning presenter announced he had a whole pitch book with revenue projections available for review. Don’t be part of this last group. It’s lame, it’s obvious, and it doesn’t really fit into the spirit of the hackathon.

Our team usually enters with a pretty clear vision of what we want to build in our heads. We may have a name in mind, and have usually tinkered with some APIs beforehand, but every bit of design and coding happens that day. Starting from scratch is part of the fun.

One practical note – for certain APIs or services, you might need to register for access in advance. For example, when we built Flymodo for our first Disrupt hackathon, applying and getting approval for access to a flight stats API took 2 days. If we hadn’t researched that in advance, our project wouldn’t have been possible.

Not for Sissies
Hacking begins on Saturday, May 21, at 2pm ET. Things come to a halt the next morning at 10am. That’s 20 hours straight of discussions, decision-making, and actual coding. Exhausting is an understatement. But that’s what makes it exciting. The constraint of working under such a tight deadline makes everything take a backseat to actually launching.

Not sure what to build? Just pick something, anything, that you think would be cool (don’t worry about business models). Stuck on a certain feature? Throw it overboard. Communication problems within your team? Get over it. There is no time for anything but being productive.

Sharing Your Hack
After working all night, what could be better than presenting in front of a group? Be warned: this is about as tough as a presentation can be. You have just 90 60 seconds to demo a product that you aren’t sure will work to hundreds of smart people (even more on the webcast!), all after being awake for about 36 hours. Take some advice we learned the hard way: start thinking about your presentation hours before you go on. If you try and get your thoughts together at the last minute, you’ll crash and burn.

And keep it brief. The judges are serious about the 90-second time limit. Try and go over by even a few seconds, and you’ll be thrown off stage like you’re playing the Apollo.

Why Everyone Should Be Paying Attention
Even if you’re not attending the hackathon, you should still keep an eye on who participates and what they build. There are great ideas and even greater minds involved with this event. When Group.me (then called Groop.ly) presented, they were met with a nice but mild reception from the crowd. They later went on to raise $10 million dollars. There are projects with huge potential presented on Sunday morning and the savvy observer can find some amazing opportunities.

There is also no greater truth in the startup world than “good people are hard to find.” The people that participant in the hackathon are bright, capable, and willing to put their talent to the test. They’re not just a bunch of talkers, they’re producers. Best of all, since there is no prize money attached the Disrupt hackathon, many participate for no other reason than a love of the game. Aren’t those exactly the kinds of people you want to fund or hire?

All Eyes on Sunday
Sunday morning, starting at 11am ET, the presentations of each team’s hacks will begin. Some will be amazing, and some won’t. And who knows if there will be another breakout star just waiting to be discovered.

Either way, it’ll be a great chance to see a group of people who are really good at what they do, doing exactly what they’re good at: hacking.

For example, look at Powerpoint. Much has been written about what is wrong with your average Powerpoint presentation, but we all already know the common problems. They have too much text, are visually boring, and serve more as speaker notes than as an actual enhancement to the presentation being given.

But think about what a user is given when they create a new presentation. The “easy-to-use” template reinforces the standard header across the top, bullets underneath model. Is it any wonder that most finished presentations adhere to that format?

Or look at how getting off on the wrong foot affects online security. While at our computers, we are constantly being asked to create and enter passwords. Is it any wonder that many passwords are not secure? “Words” are easy to guess. If you were asked to create a passphrase, resulting in more unique word combinations, our accounts would be much more secure. Is it possible that one of the biggest problems with online security is simply the use of the word “password?”

Whether you are designing a product, writing a manual, or even running a retail store, analyze the first moments of any user’s experience and think of ways to improve. When you start off on the wrong foot, it can be extremely difficult to fix things later.

A long-time member of the same gym, she has repeatedly seen attractive coupons on daily deal sites for other gyms in New York City (where they live). A typical deal would be something like a 30-day gym pass and 5 personal training sessions for $45. This is cheaper than the monthly fee at her current gym, which also doesn’t include any training sessions.

So she decided to quit her gym, and jump from place to place each month using coupons purchased from these sites. Considering how many competitors Groupon has spawned and the fact she is in a major city, it hasn’t been a problem finding the deals in advance.

This doesn’t bode well for local businesses.

Why Businesses Play Ball
Daily deal sites typically look for offers that are 50% or more off of the original price. They then take a 50% cut of the deal offered, leaving each business with about 25% of the original price. So why would they agree to such a deal?

Primarily because of the belief (promoted by these sites’ sales teams, of course) that this is a great source of new customers. A user will try your gym for 30 days, love it, and become a member. Or someone will visit your restaurant they found on Groupon, and then continue to return. You might take a hit on the first visit, but it’s all in the name of building repeat business.

Whose Customers Are They?
The big question is: who owns this customer? Do they truly belong to the restaurant or gym, or does their loyalty lie with the deal site? Many retailers are finding out that it’s often the latter. When users start to focus on the deal site first, the local business loses. Want to go out to dinner? Instead of visiting an old favorite, why not see what restaurant has a recent Groupon? Need a gym? Why pay full price? Just hoard a few different discount codes to use in the future. Suddenly, instead of driving new regulars, these sites will become a primary source of price competition.

The Cost of Retention
My wife recently tried a spa that had a great LivingSocial deal. After looking at the full price of services, she decided not to return. However, they recently contacted her, offering a package at the same price of the original deal. It turns out that most of the LivingSocial customers weren’t willing to pay full price, so the spa decided to extend the deals (indefinitely?) to keep them coming.

Did the daily deal bring the spa new customers that they otherwise wouldn’t have? Sure. But at razor thin margins compared to their other customers. And any word of mouth generated by this customer base will bring with it an expectation of the same low prices. It’s not difficult to see how this will continue to erode profit margins for these businesses.

The New Walmart?
It’s impossible to overestimate the effect Walmart has had on the world of retail. Since Sam Walton opened his first store in 1962, the company has reduced retail profit margins and dramatically lowered prices industry-wide. Other retailers are forced to keep their prices as competitive as possible.

Daily deal sites could have the same effect on local business. Instead of being a loss leader to acquire new customers, they could instead just drive prices down, making once loyal customers more price-conscious and harder to retain.

Be Cautious
What once seemed like an opportunity could become a major threat. Local businesses would be wise to consider what else may come through the door when they open it for a daily deal. Successful businesses aren’t just built on more customers. They also need to be the right customers.

This is unusual in any company, much less one of the most popular websites in the world. While it has at times created problems for Facebook and left them with a PR mess that needs cleaning up, it has also allowed them to move incredibly quickly and keep up with their explosive growth. It also gives them a competitive advantage that other large companies just can’t top.

Being More Like Facebook
Based on this revelation, Calacanis decided to completely overhaul his company, Mahalo, and “remove everything between the developer and iterating on the product.” He cut back on people and positions, eliminating the formal role of product management. One of his more interesting decisions involved the actual creation process:

No more formal wireframes is Rule #1 at Mahalo. You build your wireframe in HTML — or maybe on a white board or bevnap at a bar.

No more mockups is Rule #2. Instead of having a product design team, we’re outsourcing our site design to independent design shops and individual designers of note.

This instantly made me think of the hackathons that we participate in at my company, Kickstart Concepts.

Running a Company Like a Hackathon
This is basically how we operate during a hackthon. With a limited amount of time, we don’t have the option to create traditional wireframes, have lengthy discussions, or entertain a formal review process. We just build. Every minute of effort needs to be spent on something usable.

For example, the advantage of building prototypes or mockups in HTML is that once you’re done, you actually have a skeleton of a site to continue working on. By eliminating traditional product management, you’re removing the massive layers of overhead that go into administration, developing spec documents, traditional project management and more. It’s amazing how this sense of focus can produce incredible results in a short amount of time.

In a hackathon, these are all removed by necessity. At Mahalo, they’re being removed to reduce drag on the product and allow the company to innovate at a much faster rate.

A Growing Approach
Hackathons demand the type of iterative prototyping, rapid-development approach we use with our clients at Kickstart Concepts. And Facebook is helping drive it’s adoption, with Mahalo being a great example. But this road isn’t without its bumps. The secret is to just have more big wins than big losses.

I’m excited to see how this change in direction will work for Mahalo. It’s not easy to make a decision like that, and I applaud Calacanis for taking the leap.

Now comes the fun part: seeing how it plays out.

“If only I knew {something}.”

Within the world of web start-ups, this is often programming. “If only I knew how to actually code, I could launch my business.” But it applies to other things as well. I have met people who have an idea, but decide the best way to start is by learning how to write a proper business plan. Or people who want to be a professional blogger or author who read about writing instead of, y’know, actually writing.

Skills Help, But Only to a Point
I’m not saying that learning a certain skill won’t make something easier. If you want to build a website, it’s a big help if you can build it yourself. But too often people push aside good ideas for the pursuit of learning something they’re convinced is required for success, instead of finding a way to work with the tools already at their disposal.

The focus on “learning” before doing can become it’s own endless pursuit, never leading to the perfect moment where you feel you now know what you need in order to succeed. There will always be another blog to visit or book to read to “know enough.”

Does this sound familiar?
You read a book on productivity instead of being productive. You watch a show on organizing your closets without touching your messy closet. You spend time researching the best running shoe to buy before you ever step outside for a jog.

We’ve all done this. And it’s tempting, because learning about something often gives you the illusion of progress, making you feel you are closer to your goal, even though it can become just another roadblock.

You’re Smart Enough
It’s important to continue learning, and in the pursuit of any idea, you’re going to learn more and acquire more skills than you would have ever imagined. But stop looking at learning something new as a prerequisite that needs to be done before you work on the thing you really want to do. Start thinking about the strengths you already have and how they can be leveraged to achieve your goal.

Here’s a secret: you’re smart enough to do it now. So stop focusing on just learning how to do something, and try doing it instead.

So what is the key to encouraging someone to recommend your business to others? How do you reward or incentivize people to refer new clients?

Showing Your Appreciation
You could just thank people for sending business your way. You could show your appreciation through a small gift or gesture. Or you could reward them with a discount or other offer tied to your business or service? So which to choose?

The question is really about social norms (doing things to help someone out or feel good about yourself, asking for a favor) vs. market norms (being financially rewarded for something, paying for a certain action, creating financial incentives to provoke actions). Either can play a role in what someone chooses to do.

The Science Behind Our Behavior
In his book, Predictably Irrational, behavioral economist Dan Ariely illustrates the effects that social and market norms can have on our behavior and how fragile social norms can be.

He shares the following story about a day care center in Israel:

An excerpt from Dan Ariely’s Book Predictably Irrational

My good friends Uri Gneezy (a professor at the University of California at San Diego) and Aldo Rustichini (a professor at the University of Minnesota) provided a very clever test of the long-term effects of a switch from social to market norms. A few years ago, they studied a day care center in Israel to determine whether imposing a fine on parents who arrived late to pick up their children was a useful deterrent. Uri and Aldo concluded that the fine didn’t work well, and in fact it had long-term negative effects. Why? Before the fine was introduced, the teachers and parents had a social contract, with social norms about being late. Thus, if parents were late — as they occasionally were — they felt guilty about it — and their guilt compelled them to be more prompt in picking up their kids in the future. (In Israel, guilt seems to be an effective way to get compliance.) But once the fine was imposed, the day care center had inadvertently replaced the social norms with market norms. Now that the parents were paying for their tardiness, they interpreted the situation in terms of market norms. In other words, since they were being fined, they could decide for themselves whether to be late or not, and they frequently chose to be late. Needless to say, this was not what the day care center intended.

But the real story only started here. The most interesting part occurred a few weeks later, when the day care center removed the fine. Now the center was back to the social norm. Would the parents also return to the social norm? Would their guilt return as well? Not at all. Once the fine was removed, the behavior of the parents didn’t change. They continued to pick up their kids late. In fact, when the fine was removed, there was a slight increase in the number of tardy pickups (after all, both the social norms and the fine had been removed).

This experiment illustrates an unfortunate fact: when a social norm collides with a market norm, the social norm goes away for a long time. In other words, social relationships are not easy to reestablish. Once the bloom is off the rose — once a social norm is trumped by a market norm — it will rarely return.

The fact that we live in both the social world and the market world has many implications for our personal lives. From time to time, we all need someone to help us move something, or to watch our kids for a few hours, or to take in our mail when we’re out of town. What’s the best way to motivate our friends and neighbors to help us? Would cash do it — a gift, perhaps? How much? Or nothing at all? This social dance, as I’m sure you know, isn’t easy to figure out — especially when there’s a risk of pushing a relationship into the realm of a market exchange.

More Than Just Money
Which brings us back to your clients. Clearly there is some market relationship between you, as there is a financial exchange for the service you provide. But the best client relationships also share a social bond. Besides enjoying your work, your customers should like you as a person (we all want to do business with people we like). And when you are liked, your clients will want to help you. They will also want to help the person they are referring you too, as they feel the service you provide would be of value to them.

The Importance of Giving
This social bond should also be a two-way street. I encourage my clients to reach out to me with questions, even if I don’t charge them for it. And I occasionally sprinkle in a little work here and there that I don’t charge for. Some people would call this working for free. I consider it doing someone a favor. And it’s been my experience that people are always excited to be able to return a favor (like through a referral). I usually only do this for clients who I feel are friends as well as customers. And it’s usually that same group that sends me new business.

Plus, a referral is much more powerful when it’s delivered due to social norms. When there is a financial reward involved, it dilutes the value of the recommendation. It creates the perception that someone may be recommending you not because they value your service or want to help you, but because there is “something in it for them.”

This isn’t to say a reward can’t be offered at all. A nice bottle of wine or tickets to an event can always help you express your gratitude for their support. But keeping any rewards seperate from whatever service you provide can help establish and protect the social bond.

Keeping The Balance
Balancing the social and market aspects of your client relationships can be tricky at times. But keeping the right mix of both is crucial to success. Otherwise, you run this risk of becoming just another vendor.

]]> http://www.websterism.com/2010/07/should-you-offer-rewards-for-referrals/feed/ 0 http://www.websterism.com/2010/07/should-you-offer-rewards-for-referrals/ http://feedproxy.google.com/~r/Websterism-BigIdeasSmallBudgets/~3/rSteKtiNBlE/ http://www.websterism.com/2010/07/the-difference-between-tools-and-talent-or-what-we-can-expect-from-google-app-inventor/#comments Mon, 12 Jul 2010 19:41:46 +0000 Mark C. Webster http://www.websterism.com/?p=1462 The tech press is buzzing today with word that Google has just brought “mobile app development to the masses” with the launch of Google App Inventor. The company claims that the tool enables non-coders to develop apps for any phone running on the Android platform.

In a nutshell, App Inventor lets anyone assemble a mobile app by connecting a bunch of “blocks” of code. Apparently Google has been testing this new tool with students in different schools over the last year. The goal is to make mobile development as accessible as possible.

The Dark Side of WYSIWYG
One of the great things about the Internet has been that (in theory) anyone can participate and build websites through the use of what-you-see-is-what-you-get (WYSIWYG) tools. But that has come with a price. The web is full of poorly-designed, poorly-constructed websites. Worse still is that there exists a belief among many people that everyone can design and build websites and that it “isn’t that hard” (anyone who has worked with clients will attest to this). This has led not only to a sea of mediocrity across the web, but also a perception problem regarding the skill and value of web designers and developers.

The New Microsoft Frontpage?
What will the Google App Inventor likely lead to? A whole slew of Android apps ranging in quality from decent to god-awful. I would be shocked to see many useful apps come from this tool. Building great products is about more than just having the tools to do it. Giving anyone the ability to produce these applications with a WYSIWYG platform will mostly lead to horrible results, much like Microsoft Frontpage lead to mostly horrible websites.

The Silver Lining
The upside here is that it will lead to increased interest in mobile development. Users will start to tinker with App Inventor before deciding to learn how to actually develop these types of applications, much like Frontpage and Dreamweaver introduced many of us to web development, enticing us to continue on and improve our skills. This promises to take mobile development out of the hands of a few and grow a much larger talent base.

Whenever you lower the barrier of entry to a platform, it usually floods the market with a lot of garbage. But it also provides an opportunity for true talent to rise above the rest. So I don’t expect great things from Google App Inventor, but I do expect to see great things from the people who got their start with it.

One of the first lessons I learned when starting out was to read everything you can find about freelancing. While there is definitely some questionable advice out there, it’s a good idea to consume as much information on the topic as possible. Recently I picked up a copy of The Wealthy Freelancer by Steve Slaunwhite, Pete Savage, and Ed Gandia. I’m working on a full review of the book, but they had a great suggestion I wanted to share now.

How to Bill Clients For Your Work
Deciding how and when to bill clients for your work is an important part of freelancing. You need to find a balance between being reasonable and protecting yourself from bad clients. The book outlines the following steps to striking this balance.

Step 1: Collecting a Deposit Before You Start
In the book, the authors talk about the importance of collecting a deposit before starting a new project. While some freelancers just starting out may feel awkward collecting money before they’ve done anything, this is a crucial step in making sure you aren’t left working for free. Also, when a client pays a deposit upfront, they are showing that they take the project seriously. Any hesitance regarding paying a deposit is a huge red flag and should make you think twice about working with someone. The authors suggest 50% to start. Personally, I sometimes collect a slightly lower amount depending on the job, but there isn’t any science behind this decision. It really just depends on what the freelancer is comfortable with.

Step 2: Collecting the Balance Upon INITIAL Delivery
Now this is where the book gets interesting. Instead of collecting the remaining balance upon final delivery of your work, the authors suggest billing the client for the outstanding amount upon INITIAL delivery of your work and giving them some set time period (30-45 days) to pay the invoice. This helps to ensure that they deliver any feedback or changes promptly and prevents projects from dragging on and on (something I like to call Final Approval Hell). This is definitely a novel approach and I have never met a freelancer who does it. But I might try it on several projects moving forward to see how it goes.

The Importance of Getting Paid
When you decide to freelance, you give up the predictability of a paycheck, so it’s important to create as much structure as possible around how you bill for your time and work. By setting these types of formal payment arrangements, you’ll not only provide yourself some much needed security, you’ll also encourage your clients to be on their best behavior.

The techniques used in video games can teach us lessons for all kinds of product experiences. Whether you’re explaining to users how your web app works or showing a user how to set up their smart phone for the first time, video games can help illustrate how to find the balance between instruction and entertainment.

Below are a few lessons that video games can share about creating great product experiences:

Don’t Expect People to Read the Instructions.

Many games include a tutorial at the very beginning to give users a hands-on lesson on how the game and controls works. The image above is from Call of Duty, showing the training course that serves as the first level. Simulating the actual gameplay in a structured environment gives users a chance to test things out.

Walking users through their first experience with your product will give them an opportunity to learn how to do something without any concerns about making a mistake or accidentally deleting something.

Take Advantage of Downtime

Most modern video games use load screens when first starting up or in between levels. It’s common to see tips or tricks included on these screens, so that users aren’t just staring at a dead screen. The image above (also from Call of Duty) shows how each load screen has an “Intel” area where game tips are shown.

With many products, there is going to be some inevitable downtime. It may be when a user is waiting for an email confirmation to show up in their inbox. Or as a travel site completes a search, or a device is being configured for the first time, or a piece of software is installing. Take advantage of that time to educate a user about a feature or tip that may not know about. By sprinkling this kind of information throughout the product experience, you will work towards building smarter and savvier users.

Build a Great Default Experience. Then Allow Users to Change It.

When game designers create a game, a lot of thought is put into how the controls should be setup. When a user first picks up the controller, the interaction should be intuitive, responsive and enjoyable. So nailing the default setup is crucial.

But there are always users who want to have specific preferences. Maybe they are used to a layout from a different game and want to configure this game to work in a similar way. Not allowing for this type of customization can lead to annoyance and frustration.

Most users won’t change initial preferences, so focusing on building a good default experience is a must. But allowing power users to go in and edit the experience to their liking is an important part of building loyal fans.

Saving Progress Should Be Easy.

I still remember playing the original Super Mario Brothers. Three lives, no way to save. You basically had to play it all the way through in one sitting. It was maddening (though oddly intoxicating for an 11 year old).

Most games today employ Checkpoints. As you’re playing, you’ll hit a checkpoint and your game is automatically saved to that point. Having your work saved without requiring a user to manually take an action is a good idea for obvious reasons: we’ve all seen hours of work lost when something happens to our computer before we saved it.

The less responsibility that a product places on a user for having to do certain tasks or follow certain practices, the better. One example of this is a shopping cart on an e-commerce site. If a user has added something to their cart, it should be there the next time they come back, regardless of whether or not the last transaction was completed (or even if they have an account with that site).

(Note: as I write this post, I see a Draft copy being automatically saved every so often in the toolbar. Nice work WordPress!)

Video Games Are Nothing But an Extended Product Experience.

A video game is judged solely on the experience it provides a user with. By adopting some of the best practices used by video game designers, businesses can ensure customers find their products both entertaining and easy to use.

On Day Two, a company named art.sy presented their plan to change the way people discover fine art online. One of the judges they presented to was Jason Calacanis, CEO and Founder of Mahalo, a user-powered search engine. During their product demo, art.sy had a problem connecting to their site over the network and they stumbled over showing a key piece of their product.

When the judges shared their feedback, Jason Calacanis has this exchange with art.sy founder Carter Cleveland:

Calacanis: “What you have to do when you do these presentations is you have to channel Steve Jobs. And after he shows you something, he’s like, “Oh, and one more thing, let me show you something…insane.”

Cleveland: “That’s exactly what we did when the internet just like…when the search page stopped working.”

Calacanis: “That’s no excuse. You could have had this demo in tabs and as a screencast and you should have had that as a backup. That’s your f*ckup. You’ve got to be ready for the Internet to get screwed up. You’re at an Internet conference! You have to do better. You should have had it canned so you can switch immediately.”

And for anyone following Apple’s Worldwide Developers Conference (WWDC) today, you probably know that Steve Jobs had his own network connection problems during his presentation of the new iPhone. As Jobs floundered around, trying to get the wi-fi to cooperate, he seemed to have no backup plan, finally giving up and jumping over to a lame comparison of photo quality in the new version of iPhone (video embedded below).

It was odd to see the usually polished Jobs make such an amateur mistake during a product demonstration. But it further proves the importance of Calacanis’ comments.

There are no excuses for a bad presentation.

Creating a backup plan is a crucial part of being a great speaker. So when you get up in front of a group of people, make sure you’re ready for anything.