Here are my 5 questions with Jerome and his answers:

1) In a recent New York Times article The Yin and the Yang of Corporate Innovation there is a discussion between the merits of a bottom-down (think Google) versus a top-down (think Apple) approach to innovation.  What path has SnapEngage taken with regards to the evolution of its innovation?

I do not believe we have taken either of these approaches; If I was to give a name to our approach I would call it “outside-in”. I have come to learn our customers know best what they want. So we have a vision for the product, we know where we want to go, and we’re using the product internally, but we don’t possess knowledge as broad or as good as our customer base. So our approach is to listen to our customers and they are really the ones driving the product innovation. To be honest, we cannot actually take credit for any of the ideation of capabilities in the product. Our customers have done it through feedback via social media and blogs, in person, as well as communication with our company.

To insure this effort is successful we use different tools for this. One I like is Pivotal Tracker. With Pivotal Tracker we can track very detailed development tasks, this allows us to be very agile and deliver them quickly to our users. Inside those tasks we actually track who was the requester so we can deliver the feature directly to the customer who asked for it initially, or to a group of customers and get their feedback quickly to make sure it is exactly what they wanted. We also keep extensive logs and road maps on Google Docs that the company shares. We have monthly and quarterly internal reviews to evaluate our successes and failures. We used to react to every piece of feedback, which isn’t scalable. Through these tools we can sort the data better and make determinations about what to work on for the betterment of our customer’s experience with the product.

2) You make use of the freemium model to market SnapEngage. Are you an advocate of this model? And if so, what advice do you have for entrepreneurs to implement this model successfully in marketing their own products? If not, what warnings do you have about this model?

I don’t know if I would call myself an advocate.  We use it because it makes sense for our product because inside the free SnapEngage widget we have a small advertisement for SnapEngage. So if a free customer is going to use our product just a little bit, not enough for them justifying paying for the product, they’re actually paying us by putting our brand on their website. So we look at this as a win-win, it is creating more traffic for us and our most advantageous  customer acquisitions so far are all through word-of-mouth. So it’s people who use it on a different website, or those who have heard about it other ways, that make it to our website. So for us a freemium model adds some value because we are able to put our brand name on other people’s websites. Yes, it costs us a little bit in free support, but not much considering the value we get from building product advocates. Plus we have a great product, which you need to succeed using a freemium model, people use it and then eventually become customers.

3) Your company offers world class customer service, not only to paying customers but to prospects as well. Free customer service to non-paying customers is obviously not scalable without an assumption about conversion. What considerations were necessary to make sure this level of support was/is sustainable (outside the obvious answer of “making sure you have a best-in-class product that converts”)?

Great service builds brand advocates which is a powerful form of marketing. Our company mantra is to treat every customer or prospect exactly the same way. To make it scalable we constantly try to improve support. We have focused on really making our FAQs usable so people can help themselves if they’re so inclined. However, we have no scripts or time budgets for interactions with people. So far this has worked for us, and people enjoy talking to real people.

4) In a 2003 TED video Seth Godin talks about a company needing to be “remarkable” in order to maintain a high level of success (Seth Godin on Sliced Bread). Live chat has been around since the 1990s with products such as ICQ. In the world of live chat, how have you built SnapEngage to ensure it is a product your customers remark about?

This brings us back to listening to customers, and if we go back to the history of our company that’s how we build the SnapEngage product. Initially, our company was a video distribution solution, a completely different use case but some of our customers asked us for a small feedback widget they could put on their website. So we built it, and then those early customers asked us for a more real-time way of responding to customer feedback, and that’s how we got into the live chat business! It was just by listening to our customers and their feedback. And this approach has led us to develop features and capabilities which are different from our competitors; an example of this is putting the chat agent’s picture in the live chat window. This feature, asked for by our customers, has created a more personal engagement for them with their customers. When a website visitor sees a real person’s smiling face, they are way more likely to respond to this message and engage. I like this feature because it highlights that we’re really about developing a more personal engagement/experience with users.

5) One has the opportunity to meet much of your team simply by engaging them through your application via your consumer facing website www.snapengage.com.  Outside the unique advantage of getting a potential prospect instant interaction with your product, one also quickly learns that SnapEngage is a company of really cool people that are willing to go out of their way to help you. Is there any advice you can share on how you’ve been able to develop such an outstanding company ethos?

Luck plays a part. So far we’re very fortunate to find the right people. Of course, leading by example is effective, showing anyone that comes onboard that SnapEngage is friendly with all our customers. As a founder I’m still on live chat and phone support, it is important that I know what our customers are talking about or asking. Furthermore, we don’t believe in believe in mechanical systems like typical customer service organizations offer.  They have scripts, scenarios and protocols. We empower our agents to interact as real humans with all customers so we don’t really have guidelines for our teams expect the one: your aim is to help the customer. Giving our employees this liberty makes a big difference on how they successfully interact with customers.

Hiring is obviously extremely important as well, we spend a lot of time on the hiring process. I interview at least 30 candidates for each position and we are really, really careful on who we hire because it is so important. Also, we involve the entire team in the hiring process… the entire team is involved and everyone gets a vote, this helps ensure the new hire is a good fit. We make any new hire read Zappo’s founder Tony Hsieh’s Delivering Happiness book as an excellent model to follow.  Lastly, we make sure that each employee has time to follow up with customers to make sure that they have had a good customer experience, and if there is an issue, a chance to find out how to improve.

Here are my 5 questions with Erik and his answers:

1) You have been able to secure two pretty impressive top level domains, albeit in two topics that are quite divergent from one another. What is your methodology for evaluating the potential worth, and arbitrage value, for a high-value domain name before you buy it?

There are 4 factors I consider when purchasing a domain:

• Current traffic (how much traffic does it currently generate)
• Potential traffic (how much traffic do I think I can generate based on keywords in the domain)
• Brand (how does it sound? how easy to type? how does it “feel”?)
• Market (how monetizable is each visitor?)

I’m not shy about spending money on a domain because your domain is your brand, your address, your face, and your #1 sales person all rolled into one. Get over the notion that “domains cost $9”. They don’t.

I have purchased many domain names in the 4 figure range and flipped them in the 5 figure range because I knew they were undervalued. I’ve also bought domains I thought had potential and then had to take losses on them. But that isn’t the business I want to be in. I think the Web is changing. Keyword-heavy domains, mass content farms – those things are fading. I believe the future of the Web is strong brands on top of top-quality services, products, and content. That doesn’t mean domain names aren’t important anymore, it just changes which domain names are important.

2) How have the Google Panda update, and the reported addition of social queues in search ranking algorithms, changed the way you architect your initial domain and search strategy?

Panda hasn’t changed my views on creating high-quality sites and experiences. It has, however, harmed those who rely on mass quantities of low-quality or duplicate content. Building a high-ranking site shouldn’t be easy, and Panda reinforces this. I’ll be honest – I have a site I built for fun a few years back that makes decent passive income. It lost 60% of its traffic with the Panda update. And while I’m sad to lose some cash-flow, it’s almost a relief – the site isn’t that great and didn’t deserve the traffic it was getting!

3) Some sources have claimed that .co might have the potential to compete with .com. As of now this hasn’t proven to be true. Do you think there will ever be a generic top-level domain (gTLD) that can legitimately compete with the visibility and value of a .com?

No. No. And no. There will always be new TLDs, and they will be useful, and sites will be built on them. But .com will always be #1 by far.

4) Regarding Exercise.com, how do you believe the Web has changed the landscape of the fitness industry given that exercise is such a physical activity within and outside the walls of the gym (where Web activity is primarily virtual)?

The Web hasn’t YET changed the landscape of fitness. That is what we are working on. The thing is, in the end, people need to be eating better and moving more. And you don’t do that well from behind a computer. The Web will change fitness by delivering better content, making the in-between-workouts more social, and adding motivational and accountability features. BUT, it can’t change the nature of man and that objects at rest tend to stay at rest. It’s a tool, not a solution, just like an inert hammer. You have to pick it up and do the swinging on your own. And getting someone to want to do that… it hasn’t been solved yet.

5) Many would argue that mobile devices such as smart phones, but also mobile metric tracking devices like Jawbone and Fitbit, will eventually have a significant influence in the way technology helps positively influence fitness. With this in mind, what excites you most about the future of technology and fitness?

Those tools will be immensely helpful for people who are motivated and in-process toward reaching their goals. Again, they are neat tools, and I find them interesting and useful for people who exercise. What has me worried going forward is that technology doesn’t yet know how to assist people’s will power. It’s too easy to ignore the beeps. I don’t want to be a pessimist on the topic, but until a device can seriously impact the cravings to eat unhealthy foods or meaningfully get people off the couch, they will remain novelty items. And people will keep making them, because people buy them with the hopes they will help them make a change. But they don’t. The change has to come from deep down inside, and the commitment has to be kept up from inside.

No exterior tools, gadgets, or pieces of equipment have yet been able to impact that. They all end up as sad lifeless devices for people who can’t muster their own will power. The unfortunate “good news” for people who make those devices (and websites, and DVDs, and books, and…) is that the market for fitness “help” is infinitely large because most people never get the internal piece figured out and keep buying new stuff to help themselves. So it generates a lot of $$$, but little results. I want to see that change, and I want to be part of it.

I see this as two separate questions. First is the  crazy proliferation of content and the second is whether the easy availability of open source tools contributes to that. It’s astounding how much content is being pumped out today. There are “content farms” hiring amateur writers and bloggers to churn out cheap content just to please the search engine gods (if you don’t mind being frightened, see this infographic). Some of these sites  don’t even write original content – they just scrape content  from other sites, or even auto-generate virtually useless content  based on keywords and algorithms – anything to make it into search results. It’s become such a widespread problem that Google has released extensions and plug-ins that let end-users vote down suspected content farms in search results. It’s a massive headache for Google, and a frustration for legitimate publishers trying to compete for those top SERP spots. Data pollution is the dark side of the over-proliferation of content.

Democratization of publishing has also led to a huge proliferation of content that’s legitimate but just not very good – the amateur blogger syndrome. That’s not really a problem, just a reality – we all need increasingly good filters to surface the best content.

Now we have the incredible rise of social networks (Facebook, Google+, Twitter, Tubmlr, etc. ), and their mix of public and private content. Social is obviously relevant, and there are a lot of good social signals amongst the noise, but it’s made life really difficult for the bloggers. Very few people will visit a blog as a daily destination anymore, and people simply don’t see content on blogs unless pointed to it from a social network. We’re using social nets as filters to address the proliferation of content – “If my friend recommended it, it must be worth reading.”  After a while, many of us old-school bloggers have just thrown up our hands and started posting most of our content on social networks… reserving the blog for the best/most unique content we have to offer.

One thing that hasn’t changed is the need to be where the audience is, and that place will always be a moving target.

2) With Bucketlist (bucketlist.org) you have created a public sandbox where anyone can share their ambitions and desires with the world. Unfortunately, there are people out there with desires that can be viewed as harmful to themselves or others. For instance, a provocative goal worthy of pursuit to one person could potentially be offensive to others. With limited resources, how have you managed to make sure your sandbox is accommodating to the masses while still remaining safe?

Anyone doing a site like Bucketlist is going to face the challenges of varying moral values and social norms. You have to start by thinking about who you want your audience to be. Do you want to appeal to families? Or just adults? For my site these issues came up pretty quickly. For example, are sexual life goals okay? In my mind, they are as long as they’re expressed in a tasteful and non-vulgar way. But sometimes it gets graphic… so then the question is how graphic is too graphic? And, what constitutes obscenity? It all comes down to soft rules. I use a flagging system, but still need to make lots of subjective decisions. For example, take the goal “Come out of the closet.” In my opinion a great goal, but I have people marking it as offensive. On the other hand, people have posted things that are also morally OK with me but framed in really vulgar terms, and I do delete those. Right now I manually check out all flagged items, but as the site becomes more popular I’ll rely on the database to surface the most-flagged items for review.

Decency is subjective and it’s all a gray area, I know. Basically the criteria I use is “Would I want my niece to read this? Would I want my nieces to think their uncle is the kind of person who would run this kind of web site?”

We also have a very clear “No naughty bits” posting policy that users agree to upon signup. Users are warned that if they post content that is offensive to a reasonable person, or try to use the site to promote their own business, I will not just delete that piece of content, I will delete their account and everything that goes with it, no questions asked. I was dubious whether it would be effective but amazingly, I have not had to delete a single spammers account yet. It’s inevitable that I will, but so far so good.

3a) What site(s) do you think is (are) the best example of pushing the limits of a CMS system (ex. mine currently is Jay-Z’s WordPress implementation at http://lifeandtimes.com)? And why?

CMSs are all so different, and some are easier to “push to the limits” than others, but honestly, I no longer believe in CMSs for complex sites – it’s all about frameworks for me now. CMSs get in the way more than they help, and developers will have a better experience with Ruby on Rails or Django than they will with Drupal or Joomla or any other CMS for that matter. Though I do still use WordPress for a lot of general-purpose sites, I go straight to Django for complex sites.

Don’t get me wrong – WordPress is wonderful. It’s so easy to get up and running, but it makes certain assumptions about the shape of your content. It starts with the assumption that every piece of content on your site has a title, and a content body, and a summary, and a timestamp, and an author, and a category, etc., etc. That fits lots of basic content-oriented sites but you wouldn’t use it to create  an equipment checkout system, or a course review system, or to provide every site member with a personalized calendar. You try and do something like Bucketlist where you have complex one to many follow relationships (opposed to one to one) between users… WordPress isn’t going to cut it. You might think Drupal or a full CMS would be the way to go there, but you’ll probably spend more time wrestling with those systems to get them to sit up and do tricks than if you started with a “box of parts” like Django or Rails and simply built what you needed to begin with.

So pushing a CMS to its limits and taking it to places where it was never designed to go, in my world, all that says to me is that you’re using the wrong tools and you need to become a better developer. For me, it’s all about frameworks these days. Content management systems …they all make assumptions and you have to spend time tearing those assumptions down and working around them to get what you want. I think virtually everybody who’s trying to do something slightly unusual on the Web would be better served with a framework like Ruby on Rails or Django. Where the framework doesn’t make any assumption about the form of your content… instead it gives you a box of tools and says “here, you build this up to be the CMS that fits your goal like a glove.”

With a framework it’s not like you’re building stuff from scratch – instead, you’re assembling components – here’s your RSS system, here’s your generic commenting system, here’s your cross-site scripting request forgery attack prevention system, here’s your form building validation system, here’s your login and authentication systems, etc., etc.

That’s my take  -  I’d rather not use a CMS at all, if it is not the right tool, why push things to the limit?

3b) What site(s) do you think is (are) a textbook example for flawless usability design? And why?

A site I really admire and that we point to in our classes as a great design example is Good Magazine.  It’s tasteful and beautiful to look at, and they nail all the right design principles… things like paying careful attention to alignment, so if you have an image in one column, the top element of the column next to it should be exactly aligned horizontally with the top of the image. The design gives a sense of polish and flow to the page that you don’t get otherwise. This is the difference between “good enough” design and really polished design, where every pixel has been considered.

Usually you only get this kind of polish when the design is in the hands of one or two people rather than a whole team. When too many stakeholders are involved, you get “design by committee.” Look at the recent redesign of bostonglobe.com – it’s radically simple, and you know the lead designer had to fight some tough battles to keep it that way. It’s far too rare – usually you end up with way too much crap jammed into the homepage, trying to appease the demands of all stakeholders in the organization.

A better approach is to have a benevolent dictator imbued with the authority to make these hard calls, and who can say NO to lots of people – someone who can make choices that benefit the end user, rather than all the department heads.

4) What are the most important questions to ask before choosing and/or developing the back-end engine of a web site? At this stage of building a web site, where do you see common mistakes that could be avoided with a little forethought?

Whether you’re working for somebody else, developing your own site, working with a start-up team, or are just an individual with an idea, you need to start by assessing needs and your available skills. Again, I personally think you’re always going to be served better with a framework versus a CMS, but to do that you’re going to need programming skills.  If you’re an individual without programming skills you’re either going to have to study up, or hire someone. So one thing WordPress and Drupal offer is the ability to do a ton of great work without writing any code at all. But eventually you’re going to hit your head against the wall and wish that you had more flexibility. One of the first things that I want to know when a client approaches me is:

• What kind of developer resources do you have long-term?
• Do you have somebody who’s going to maintain the site on a regular basis?
• If you’ve already chosen a developer, how will you leverage the developer’s skills?

For instance, if you already have a relationship with some Drupal experts, obviously you’re going to get farther faster than if you chose a different platform, so that’s part of your decision criteria.

Keep in mind that the way that an engineer expects people to interact with a web site is seldom the way users actually want to interact with a website. End users will always find ways to use your website that you, the engineer, never considered. For example, there have been cases on Bucketlist where people want to enter all their goals at the same time instead of entering them individually. And I think to myself as the developer, “How can they check off a particular goal now? How can they re-arrange anything? How do they expect me to feature or promote a single goal? They’re missing the whole point…” And yet to them, that makes perfect sense. They’re proud of their list, they share it with their friends… and their friends say, “Yeah! Good for you.”

Do I need to allow people to use the site in ways that I never expected? Or do I need to find ways to prevent it? These are decisions that need to be made on a case-by-case basis.

One of the things that Apple is famous for that kind of goes contra to a lot of design and usability conventions is that they do very little interviewing of users to find out what the user wants. They have a vision. They’re thinking way beyond where any users currently are. They’re saying “This is what we’re going to do …we’re going to build something because we believe in it.” Henry Ford once said “If I had asked my users want they wanted, they would have asked for a faster horse.”  Steve Jobs has said, “I’m more proud of what we have not put into our products than what we have.”

On the flip side, some of the most famous open source software has bazillions of  preferences and options, because every time a debate happens on the mailing list, the group agrees: “Let’s just make it a user option.” This is similar to the discussion earlier about how websites that suffer from feature-itis and it takes a benevolent dictator to keep things simple.

5) In launching Bucketlist you’ve created a fairly sophisticated site in a short time window… with limited production time and limited resources. Your success is a great example of what can be done if you have a vision. What are three pieces of advice that you could give a bootstrapping entrepreneur with a big idea?

1) Assess the field and figure out what kind of competition is out there already. If your idea has been done to death, you know you’re going to have a real hard time getting traction. As history rolls on, it’s getting harder and harder to be unique. If there are a dozen copycats of your idea out there, it’s going to be tough. With Bucketlist there were a few existing similar sites, but none of them worked the way I wanted them to. This made me feel like my niche still had room for growth. Since Bucketlist launched, many  additional copycats have come online. Some have approached the problem differently, while others haven’t added anything at all. Just remember: If your idea doesn’t sound a little bit crazy, you’re probably not on the right track. You’ve got to trust your craziness. If you have some wild hunch, go with it! Just get out there and be the best at executing your nutty idea.

The key is that you need to be scratching an itch  – that’s where the passion comes from. If you’re not feeling the itch, you probably won’t have the  passion to follow through, because there are going to be lots of false starts. You need enough excitement to get you through the disappointment of the inevitable mistakes.

2) Believe in your tools. In my case, I passionately love the Django framework, and working with it is part of what I personally wanted. Yes I was passionate about the site concept, but it wouldn’t have been fun to build with Drupal.

3) Have the right kind of people on your team. Even if you’re a one-person team, are you the right person for the job? In the case of websites, can you build what you want well enough that it will be useful? In my case, I have more engineering skills than design skills, but depending on what I’m building, I may need some marketing people. In fact I’m sure if I was working with a marketing person Bucketlist would be in a very different place today. Maybe I will someday. Also, make sure all the people on your team are as passionate as you are.

So, yeah – Regarding Bucketlist I can answer “yes” to both questions. I’m the right person to build it and I’m passionate about the work. Bucketlist keeps me up at night. It’s something I’ve been building between 11:00 PM and 1:00 AM in the evenings when I’m not busy working or playing with my child. It’s what I want to be doing in my free time. The site may look complete, but I’ve got a feature wish-list 100 items long. Right now I desperately want to have a mobile version of the site, and I’ve got that halfway built. People are asking for it and I want to build it!

Here are my 5 questions with Deena and her answers:

1) One of your fortes is user experience design, and you have used this set of skills quite successfully to create website architecture for some of the biggest websites on the Internet. Similar to how a great mechanic hates to work on their own car, did you find your expertise in website design ever got in the way of actual development and deployment?

The challenge has been to wear two hats and to avoid driving our engineers crazy. On the one hand, I love designing interfaces and there’s nothing more fun than coming up with the bells and whistles for Wanelo. On the other hand, as a start-up you need to be pretty brutal about managing your limited resources.  For someone who loves innovation and features it’s very easy to get carried away. I’d say that we’ve made plenty of mistakes early on and learned a lot along the way.

2) Although there seemed to be a growing number of opportunities for female entrepreneurs at this year’s 2011 Los Angeles Twiistup, Wanelo was the only company led by a female to present. Is there any advice and/or resources that you can share with budding female entrepreneurs that have helped you along the way?

“Boys are doctors. Girls are nurses.” Here’s a page from a 1970s children’s book that provides a nice breakdown of gender roles:

The modern day version of this is “Boys are CEOs. Girls are VPs of Marketing.” Personally, I do wish that I had more ridiculously awesome female entrepreneurs to look up to. I don’t. I mostly look up to, work with and read about male entrepreneurs. And that’s the challenge for women. Role models do matter and they shape our perception of what’s possible.

However, I’m a huge believer that you create your own life. My advice for women entrepreneurs is, don’t put up imaginary barriers for yourself. You either have excuses and reasons or you have results. Choose results! The truth is that you can be a man, but believe that you are unfit to be an entrepreneur for whatever reason. Age is a good example of this. Some people feel too young, others feel too old, and there’s just no winning. So forget the excuses, choose what you want to be and do it and make it happen. Making it happen means going way outside of your comfort zone (all the time!), allowing yourself to make mistakes and learning from the experience.

As a side note, a woman entrepreneur does have the advantage of standing out in a tech crowd which is largely-male dominated. And that can be a great position to be in.

3) You have sidelined a successful service business to develop a platform that is primarily focused on products. How have you had to adapt your skill set from a livelihood that depended on making clients happy, to one that is reliant on making an audience happy?

Having a consumer audience is just like having thousands of clients . Joking aside, in our user experience design consulting practice we mostly worked on consumer web properties, so that is in my blood. My main motivation behind working in consumer Web is based in solving my own problems, so that has always been there as well. Selfish, I know.

4) Within the last year what has excited you the most about social shopping? And, what has disappointed you? How will these developments influence you as you evolve Wanelo going forward?

Honestly, I don’t think shopping is really social yet, at least the way I envision. In the last year, I’ve discovered that a couple of start-ups are trying to tackle a similar set of problems. But all of us are just scratching the surface. Social shopping is a gigantic opportunity with no current leader. It’s an exciting space to be!

5) On Quora (follow Deena Varshavskaya on Quora here), you indicated the single most illuminating question you can ask a person is, “What challenges are you currently dealing with?” So… with regards to operating a start-up, what challenges are you currently dealing with?

The overall challenge is managing complexity. The amount of prioritizing and digesting of all sorts of information one needs to do in a start-up is startling. It’s very easy to get sidetracked or spend your limited resources on something that won’t truly move you forward. It’s a highly personal thing as well. There’s no other way to succeed but to bring all of yourself into it. We’re about to kick off the fund-raising conversations, so that will be interesting and a whole new challenge for me.

On a more personal side, I’ve been doing a lot of work to remove my personal barriers. I wrote about this on my blog siberianfruit.com. The basic idea is that I’ve realized that I’ve unknowingly held on to some beliefs about what I may not be good at as an entrepreneur. I’ve been working with a great life coach who’s helped me see that those beliefs were made up and unsupported by facts. Doing this kind of personal growth work is really empowering and I now feel a lot more prepared to deal with unforeseen challenges as they come up.

The short-term rules my father and I have set further for the endeavor are that the project must remain fun and not interfere with our daily activities. We have given ourselves permission to change the rules come the day it takes off, but for now it’s just a hobby. As such, we wanted our first product to be fun… but also something people would use (preferably athletes). I have discussed in previous posts that a good entrepreneur always looks for a problem to solve. I’m an athlete but I also enjoy the occasional beer. Athletic training the day after alcohol consumption are not something that go well hand in hand so I had a problem.

Problem: Athletes that need to train the day after a celebratory event
Solution: Hangover Vitamin

A formula based on the latest scientific studies was put together and Function — the hangover cure was born. So we have our first product but now we need to get an audience. Standard entrepreneurial operating procedure when you have a product to promote is to go to the “water holes” that potential customers might be dwelling. You make nice with whoever is overseeing the watering hole’s activity and get permission to market to their audience. So that is exactly what I did. I researched and reached out to a few dozen influential beer and wine bloggers to offer free samples of Function in order to get some potential favorable buzz. I believe in the product and have gotten great feedback so why not?

The result: “Beat it!” I should have known better… The last thing operators of premium alcoholic beverage sites want to be associated with is one of the negative aspects of alcohol. I might as well have been offering discounted bail bonds for alcohol related offenses. In hindsight, why would any of these folks want to showcase one of the potential downsides of the products they are promoting… even if I am offering a solution?

Anyway, I am now searching for other watering holes to mingle in, but I thought since I am always positioning myself as the knowledgeable entrepreneur, I would expose this error in the hope that it helps someone else. Also, to highlight that along the entrepreneurial path there are always missteps. The key is to learn from them and move on.

“Trying to understand how a tech company is going to be successful is a little bit like looking at a sonogram and trying to predict the baby’s hair color.” – Marc Andreessen, Founder, Netscape

Prior to the technological revolution a company could develop a competitive advantage through simply improving operational performance. This was accomplished through the company’s leadership and their ability to discover, analyze, and exploit operational efficiencies. In the current landscape of information and globalization agility and adaptability are increasingly more essential components of effective leadership. Organizations continue to try and find ways to improve performance at the organizational and team level, and no longer simply to augment current processes, but to position themselves ahead of the curve with regards to emerging opportunities as well.

Groups are traditionally formed, inside and outside a professional setting, to perform tasks and get things accomplished (Forsyth, 2010). There are many who believe that organizing a group with one set of competencies comes at the cost of forsaking other competencies. However, this paradigm is currently being critically evaluated in a number of experimental and observational studies. One of the interesting areas of study regarding this trend is an emerging body of research on the concept of organizational and group ambidexterity. To highlight the emergence of this work, in 2004 there were less than 10 papers on corporate ambidexterity; by 2009, there were over 80 papers (Raisch et al., 2009). The purpose of this paper is to take an exploratory look about what is known about group ambidexterity, how leadership effectiveness can influence ambidexterity, and identify areas where further research is needed.

The primary construct of ambidexterity in an organization and/or group context is the ability for a group to engage in both explorative and exploitative work simultaneously. For instance, it is believed by some researchers that a group with strong ties among members has a greater capacity to exploit and implement established ideas, but inherently has a lower capacity to be creative and forward thinking. Conversely, a group with weak ties among members has a greater capacity to generate new ideas, but as a result has a lower capacity to implement them (Tiwana, 2008). It was traditionally believed that this group dynamic creates a natural dilemma between the ability of a group or team to accomplish and improve upon tasks versus their collective ability to come up with creative solutions to problems. In this sense, most researchers look at both explorative and exploitative work as innovation. However, explorative work is considered the driver of future endeavors. It is the creative process that leads to new products and new ways of thinking. Explorative work creates entirely new ways of doing things and can turn old systems upside down. Exploitative work on the other hand tends to improve processes that are already in place. It focuses on how things are currently running and functions to create improvements that optimize current operational processes.

The term organizational ambidexterity was first coined by Dr. Robert Duncan in 1976 in the article The ambidextrous organization: Designing dual structures for innovation. Fifteen years later, Dr. James March published the seminal article Exploration and exploitation in organizational learning which is credited with creating a general interest in the concept of organizational ambidexterity. During early examination of organizational ambidexterity operational improvements and innovation were believed to be essentially two separate activities which required different kinds of leadership, group roles, and structures to optimize performance in either area. During the 1990s, it was generally believed that highly functional operational groups involved in activities such as implementation and refinement would not be well suited for creative activities such as innovation, discovery, and experimentation. In other words, it was believed that being well equipped to exploit existing competencies of a group came at the cost of being inefficient at exploring new ones (Raisch & Birkinshaw, 2008).

Mumford et al. (2009) states there are four key elements to being innovative: the expertise brought to the task, the particular types of knowledge applied in solving the problem, the effective execution of processing operations in the generation of a solution, and the strategies used in executing a solution based on the group’s knowledge structures. The counterargument to organizational ambidexterity is that when the key elements for creative innovation are met in a group, tension in the group increases which limits the group’s ability to optimally act efficiently on operational talents. The underlying theory is this tension exists because of the potential conflicts in group interaction when group member attributes and skill sets are not aligned. This state leads to a natural increase in complexity at the task level and increases the ambiguity of shared goals and success measures (Forsyth, 2010).

Another challenge when talking about organizational ambidexterity is the inconsistent definitions of exploration and exploitation from one researcher to another researcher. Gupta et al. (2006) discussed this challenge and examined whether these two attributes should be treated as orthogonal or conversely two ends of a continuum. The idea of exploration appears to have much more consensus and is conceptually easier to understand than exploitation. It is intuitive that a group with a diverse member base, that possesses competing skill sets, would have a wider breadth of intellectual resources at their disposal and therefore be better at innovating new solutions than a group with members that have homogeneous skills and experience. The definitions for exploitation are more diverse and not as precise but appear to have roots in self-presentation theory. It is thought that in an evaluative group environment people tend to engage more in dominant responses than non-dominant responses (Forsyth, 2010). As established tasks get learned, practiced, and refined, an organization can better exploit process performance. However, if norms are challenged, the ability for the group to exploit is decreased. Gupta et al. (2006) also argued that ambidexterity may not always be the desired ideal and that punctuated equilibrium might be more appropriate in certain situations. Punctuated equilibrium is the concept that shifting through periods of exploration and exploitation is a better approach than trying to optimize to achieve desirable levels of each attribute simultaneously.

Therefore, some worthy questions for examination are: Do ambidextrous organizations really perform better than non-ambidextrous organizations? Can the principles of ambidexterity be applied across a wide variety of groups; on the other hand, are these principles only applicable to subgroups within large organizations (that can more effectively operate simultaneous groups that are respectively explorative and exploitative)? Lastly, is ambidexterity always a worthy pursuit or are there limits to its utility?

To answer the question whether ambidextrous organizations performed better than other organizational models, an empirical study was conducted by Gibson and Birkinshaw (2004) using data collected from 4,195 individuals in 41 business units. For the purposes of their study, Gibson and Birkinshaw referred to explorative qualities as adaptability and exploitative qualities as alignment. Through statistical modeling, they found that there was indeed a strong correlation between the dependent variable of performance and companies that possessed both high levels of alignment and high levels of adaptability (indicating ambidexterity). Based on previous work, Gibson and Birkinshaw identified various methods used by groups to increase ambidexterity such as: worker recruitment and training, decentralized group structure, trust, shared culture and vision, flexible managers, and supportive leaders.

To research whether ambidexterity is a concept with applications outside of large organizations, Lubatkin et al. (2006) used multisource survey data, including CEOs and top management team members from 139 small- to medium-sized firms (SMEs) to investigate the background and consequences of ambidexterity. Their research focused on the central role that top management plays in ambidexterity and if their influence had an overall effect on performance at the SME level. The researcher’s findings led to the conclusion that the dual pursuit of an exploratory and exploitative approach positively affects performance at the SME level. It also uncovered that behavioral integration by top management teams is essential to achieving ambidexterity. The researchers acknowledge that because of the bigger ecosystems at larger corporations some of the statistical associations may be weaker if the same tests were performed on this group. Regardless, the research points to the influence that the top management team has on positive innovative outcomes and the importance of leadership in driving ambidextrous organizations.

To better understand the underlying dynamics behind ambidexterity in group collaborations, Tiwana (2008) conducted a study using 42 innovation-seeking project alliances to examine the relationships between bridging ties and strong ties. The purpose of this study was to examine whether ambidexterity had applications across groups and in collaborative matrixes. Bridging ties cross structural holes creating the potential for innovation but lack the capacity for integration (usually due to interaction within cross-functioning teams). Strong ties create integration capacity but are short of innovation potential (theorized based on the existing evidence). Tiwana makes the argument that bridging ties harmonize with strong ties in enhancing alliance ambidexterity at the project level. While bridging ties create access to diverse, structural hole-spanning capabilities and perspectives, it is strong ties that assist in integrating these capabilities and perspectives so that groups can realize an innovation. Tiwana (2008) also suggests that these ties influence alliance ambidexterity because they assist knowledge integration at the project level. Since Tiwana elected to use stepwise regression it is wise to be a bit skeptical of his empirical results. However, intuitively his assertions make sense and it is interesting to explore how ambidexterity can transcend across groups operating within two different environments.

Accepting the notion that organizations are capable of pursuing exploration and exploitation simultaneously, and that ambidexterity leads to superior performance, Jansen et al. (2008) wanted to investigate how this practice might lead to the presence of conflicting goals. They did this by surveying executive and senior managers at Dutch branches of a large European financial services firm. By design, ambidexterity creates conflicting goals and role ambiguity which naturally can cause challenges within groups. These researchers found that senior teams who have transformational leadership were more likely to be associated with high levels of exploratory and exploitative innovations than those that had a more transactional leadership styles. Based on their analysis, the researchers reported that organizational ambidexterity requires the development of shared vision, which is an integral part of transformational leadership. Transformational leaders are also better equipped to deal with conflict as it arises, which is an inherent challenge of ambidextrous organizations.

Building from the literature on innovation, Andriopoulos & Lewis (2009) examined ambidexterity innovation through the lens of new product design consultancies because of the inherent need for these types of businesses to innovate. When the researchers polled the leadership of these firms about the inherent tension between present day operational innovation and forward thinking competitive innovation, they reported that these issues were not perceived internally as dilemmas per se but rather paradoxical attributes of ambidexterity.

Andriopoulos & Lewis (2009) identified three paradoxes related to ambidextrous organizations. The first paradox, the paradox of strategic intent, highlights an organization’s aspiration to improve good business practices while simultaneously trying to achieve profit-breakthroughs though the creation of new products. The paradox of customer orientation highlights an organization’s need to work within constraints in order to stay in line with client expectations, while at the same time operating with enough autonomy to avoid stifling the ability to properly service the client with new ideas. Lastly, the paradox of personal drivers highlights the perception that creativity is somewhat lessened when exposed to procedural constraints (ex. timelines, resource allocation, etc). Andriopoulos & Lewis (2009) make the argument that ambidexterity needs to be shared responsibility across organizational levels to effectively stimulate virtuous cycles of ambidexterity (see figure 1).

Figure 1. Andriopoulos & Lewis (2009) Virtuous Cycles of Ambidexterity

Andriopoulos & Lewis (2009) hypothesize that three factors help achieve this objective: taking a multilevel approach, employing complementary tactics when setting up systems, and learning synergies that make sure knowledge transfer is optimized among groups.

Chermack et al. (2010) suggested using organizational ambidexterity for leveraging teams toward organizational effectiveness based on the totality of the existing research although they cautioned there are a few studies that suggest the pursuit of ambidexterity might not be appropriate for every industry. However, a case is made that it can be generalized that in our new business climate, where only the most agile corporations will survive, organizational ambidexterity becomes a key competitive advantage.

A review of the existing literature supports a compelling argument that one can assume that the theory of ambidexterity is an essential attribute of a company that wants to compete in today’s business climate. As we continue to globalize, the ability for an organization to be able to concurrently operate optimally in both day-to-day operations and future innovations will trend away from merely being a competitive advantage into being an operational necessity. In this regard, transformational leadership is encouraged because it supports an ambidextrous environment. Recent history is peppered with companies that have succeeded because of their exploratory abilities. For instance, Avon began as a company selling books door to door, Tiffany & Co began selling paper, and Google started as a service to search electronic bulletin boards (Carlson & Saint, 2009).

With respect to further research, as ambidextrous theory continues to grow, it will be important to evaluate whether these principles can be applied universally. Although I have attempted to address all the original questions I put forth, the issue of ambidexterity always being a worthy pursuit was difficult based on the existing research. Therefore I only was able to currently address it at a cursory level.

Another issue about ambidexterity is there appears to be a lack of any meaningful prescriptive models for innovation that would instruct an organization on how to apply ambidextrous principles. There is empirical evidence to imply that ambidexterity is worth pursuit at both the SME and large corporate level, but there is limited information on how to successfully implement what has been discovered so far in real world applications.

Also, social orientation theory does not seem to be addressed in any of the articles on organizational ambidexterity. It seems intuitive that the extent to which group members have positive or negative orientations would play a significant role in the execution of ambidextrous principles. However, in discussions of the formation of teams, researchers rarely mention issues related to this paradigm.

Although there is a growing body of literature on ambidextrous groups, there still is a need to dissect the complexities. As our world gets more technologically complex the importance for industry to balance the creative process of ideation with the business goals of optimizing operational practices will become increasingly more important. This is further highlighted by new emerging project management paradigms such as Scrum that are predicated on ambidextrous groups and were developed to accommodate this trend.

To conclude we look at Raisch et al. (2009) who examined some of the fundamentals that make organizational ambidexterity controversial. They examined four questions they refer to as ambidexterity’s “central tensions”: Must organizations take a static or dynamic perspective on ambidexterity? Should organizations achieve ambidexterity through differentiation or integration? Can ambidexterity arise internally, or do firms have to externalize some processes? Lastly, does ambidexterity occur at the individual or organizational level?

The static versus dynamic controversy Raisch et al. (2009) references is whether static models are appropriate when framing ambidexterity. As identified earlier, the need for ambidextrous models is evident. However, a problem in this type of research is that modern contingency theory states alignment comes not from static configurations but rather a dynamic process which makes modeling a difficult task.

The controversy around differentiation and integration is rooted in the discussion of whether organizations can create ambidexterity within a single business unit or if it is better fostered through unique business units working together. Further research in this area can confirm or discredit the ability of a single group to optimally be ambidextrous.

There is some speculation that the best way to create ambidexterity is to outsource the set of tasks that are not part of your organization’s core competencies. The idea is that organizations can create synergies by sharing their respective expertise. This controversy is predicated on the supposition that ambidexterity cannot be achieved through integration. If further research makes a strong case that ambidextrous integration is possible, this issue becomes moot.

In this paper I have primarily focused on the dynamics and leadership effectiveness of ambidextrous groups. However, regarding the final controversy discussed by Raisch et al. (2009), there is some speculation that ambidexterity is better optimized at the individual level (i.e. worker recruitment), implying group formation, training, and resource acquisition could be the most viable methods for creating operational ambidexterity. Currently there is no empirical evidence to back this claim up and therefore it would be another good area for further study.

References:

1. Andriopoulos, C., & Lewis, M. W. (2009) Exploitation-Exploration tensions and organizational ambidexterity: Managing paradoxes of innovation. Organization Science, 20(4), 696–717. doi:10.1287/orsc.1080.0406
2. Bledow, R., Frese, M., Anderson, N., Erez, M., & Farr, J. (2009) A dialectic perspective on innovation: Conflicting demands, multiple pathways, and ambidexterity. Industrial and Organizational Psychology, 2, 305–337.
3. Carlson, N., & Saint, N. (2009, October 14) 10 huge successes built on second ideas. Chermack, T. J., Bodwell, W., & Glick, M. (2010) Two strategies for leveraging teams toward organizational effectiveness: Scenario planning and organizational ambidexterity. Advances in Developing Human Resources, 12(1), 137–156. doi:10.1177/1523422310365669
4. Forsyth, D. (2010). Group Dynamics. Belmont, CA: Wadsworth Cengage Learning
5. Gibson, C., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of organizational ambidexterity. Academy of Management Journal, 47(2), 209-226.
6. Gupta, A. K., Smith, K. G., & Shalley, C. E. (2006) The interplay between exploration and exploitation. Academy of Management Journal, 49(4), 693–706.
7. Jansen, J. J. P., George, G., Van den Bosch, F. A. J., & Volberda, H. W. (2008). Senior team attributes and organizational ambidexterity: The moderating role of transformational leadership. Journal of Management Studies, 45(5), 982-1007.
8. Lubatkin, M. H., Simsek, Z., Ling, Y., & Veiga, J. F. (2006) Ambidexterity and performance in small-to medium-sized firms: The pivotal role of top management team behavioral integration. Journal of Management, 32(5), 646-672. doi:10.1177/0149206306290712
9. Mumford, M. D., Hunter, S. T., & Byrne, C. L. (2009) What is the fundamental? The role of cognition in creativity and innovation. Industrial and Organizational Psychology, 2, 353–356.
10. Raisch, S., & Birkinshaw, J. (2008). Organizational ambidexterity: Antecedents, outcomes, and moderators. Journal of Management, 34(3), 375-409. doi:10.1177/0149206308316058
11. Raisch, S., Birkinshaw, J., Probst, G., & Tushman, M. L. (2009). Organizational ambidexterity: Balancing exploitation and exploration for sustained performance. Organization Science, 20(4), 685–695. doi:10.1287/orsc.1090.0428
12. Rothaermel, F. T., & Alexandre, M. T. (2009) Ambidexterity in technology sourcing: The moderating role of absorptive capacity. Organization Science, 20(4), 759-780.
13. Tiwana, A. (2008) Do bridging ties complement strong ties? An empirical examination of alliance ambidexterity. Strategic Management Journal, 29, 251–272. doi:10.1002/smj.666

Nat Turner’s takeaways, if you do not feel like watching the video below, are:

• The best time to start a new venture is when nobody else is (in other words, recessions are actually a great time to start a company)
• Luck seems to follow those that work extremely hard
• Therefore, make sure you work harder and smarter than your competitors
• Young entrepreneurs often approach problems differently than older entrepreneurs which can lead to unique solutions

Another interesting observation is that Nat cut his entrepreneurial teeth at a young age (selling reptiles out of his home). This seems to be a common theme among successful entrepreneurs (so a quick digression for parents with budding entrepreneurs… make sure to support and encourage your children’s aspirations!).

Enjoy the clip.

The acronym VEPA is often used when entrepreneurs talk about calls-to-action. VEPA stands for:

V = Value: The customer should get some value out of the desired action
E = Ease of use: The desired action should be easy for the customer to execute
P = Prominent: The action should be prominent and easy to see
A = Action: The wording should speak to action (ex. Buy Now!)

You should continually play with VEPA and your calls-to-action to maximize desired responses from customers. There are various effective online tools to help you multivariate test your calls-to-action. One of the most powerful free options is Google’s Website Optimizer. You can play with and test various attributes such as bigger or different color calls, changing the calls’ copy, or incentives for customers to act. Incentives can go a long way if done correctly.

An effective call-to-action is the linchpin of a successful sales campaign and involves drawing together best practices in usability, creativity and effective but economical copy writing. It all starts with a great button, so if you’re stuck here are 25 examples of call-to-action buttons to get your creative juices flowing.

The video above shows how The Penny Ice Creamery was able to maneuver their way through the American Recovery and Reinvestment Act enabling business partners Kendra Baker and Zach Davis to successfully deploy their entrepreneurial vision. It also illustrates the value that small business plays in a community by highlighting job creation and purchasing from local and national suppliers. If nothing else it is a testament to what can be achieved with fortitude and another example that great entrepreneurial ideas get help when they need it.

Here are my 5 questions with Barbara and my summary of her answers:
1)  In your experience as a SCORE advisor, what can you suggest an entrepreneur do better to prepare themselves to maximize their experience with SCORE? In other words, are there common, simple steps that you consistently see people skip (that they shouldn’t have) when you meet with fledgling entrepreneurs?

There are two types of entrepreneurs that come to us, those that are just starting out and those that have current opportunities or problems that they need help with. For those just starting out I suggest that they attend our introductory free workshop on start-up basics (these are offered in different locations nationally, check your local SCORE website for more details). This workshop will walk you through the pros and cons of owing your own business. It is part of a five part series SCORE launched called SmartSTART. After the first session a potential entrepreneur will at least have the chance to develop some basic questions that will assist them in making a relationship with SCORE more beneficial.

For entrepreneurs that already have at least developed a concept, or are already in operation and have come to a situation that requires assistance, come to your SCORE meeting prepared. Bring any piece of information you think could be relevant to the discussion. We are here to help. We are not a judging panel, so there is no reason to be intimidated. If your documentation is rough notes on the back of an envelope, that’s fine, at least that gives us a starting point to help the entrepreneur moving in the direction they would like to be. Without good information a lot of time is wasted, which could have been spent on allowing us to help the respective business.

2) Are there any misconceptions about SCORE, or preconceived notions about SCORE, that you find people have when they contact you for assistance?

There are some, I’ll give a few examples:

• We don’t write business plans for clients. People have come in with an idea expecting us to draft their business plan for them. Putting together a business plan defines your business. We help with the process but we don’t create business plans.
• We do not provide, and cannot help for profit companies with getting business grants. There are outfits there that make claims there is free government money to start a business. This is simply not true.
• We do not provide funds for startup or in business entities. We will help identify banks that may be lending to small businesses, make available information on SBA loans and community development centers and suggest how to access angel investors and venture capital groups.

SCORE is a volunteer research organization existing to help all entrepreneurs solve their problems. We consult on a variety of business matters but the actual doing is left to the entrepreneur.

3) Based on the adage success leaves clues, what are some common traits you have seen in most successful businesses you have helped begin and/or grow?

The most common universal activity I have seen that leads to success is gaining knowledge and experience in a particular industry before entering it. Furthermore, people lacking in management skills need to develop these skills.   Entrepreneurs that take the time to learn general business and managerial knowledge, plus the specific knowledge needed to succeed in the industry significantly reduce their chance of failing. You would think this would go without saying, but you continually see people risk a lot without any real skill, experience, or knowledge of the industry they hope to succeed in.

Three common traits are hard work, patience, and perseverance.

Finally, success is assisted by developing the right team, including a great lawyer, accountant, SCORE counselor, a friendly banker, and a trustworthy insurance contact.

4) Are there any other free or low cost resources that you can suggest to budding entrepreneurs that they might useful?

Yes, here are just a few:

• The U.S. Small Business Administration is a government entity that provides varying levels of assistance to small businesses to help them succeed.
• Small Business Development Centers assists small businesses with solving a variety of issues including marketing, organization, financial, engineering, technical and production problems.
• Women’s Business Centers is a national network of educational centers to help women start and build small businesses.
• The Woman’s Initiative provides effective social support, counseling services and education to empower women to change challenging life situations into opportunities.
• The HUB is a social enterprise that hopes to inspire and support creative enterprising initiatives that help make society a better place.

5) One of SCORE’s goals is to help start one million successful new businesses in 2017. What initiatives has SCORE taken in an attempt to meet this goal? Are there any new opportunities at SCORE regarding this goal that entrepreneurs can take advantage of?

Yes. We are excited to launch our new website in March which includes a site redesign including a new logo. The new redesign will also influence all of our regional websites. We are reaching out to more corporate sponsors in the hopes of more corporate involvement. We have realigned our mission statement, as well as our slogan, which is now, “SCORE, FOR THE LIFE OF YOUR BUSINESS”.  We are engaging in “shoe-leather” marketing by making sure our members are getting out in the community and letting people and businesses know we are here and ready to help. One of the most exciting opportunities is that we are improving our communication system and improving upon the way our current database disseminates information. We are also making efforts to expand on the current number of counselors that are currently available. SCORE has an exciting future ahead.