Marketing

A Designer in Support of Design Contests

Apr 01

15 years ago, you couldn’t even BEGIN to look for a house without a real estate agent (who takes 6-7% of the purchase price from the buyer). Today, the internet has changed that. 10 years ago, someone starting a small business had to eat a cost of thousands of dollars to get a solid looking logo– often more if they didn’t want to roll the dice on just using a solo designer (of if their first designer didn’t create something that they loved). Today, a small business can get dozens of designers working in a public forum for $500. I think that’s AWESOME. But like real estate, there are casualties. And, like real estate, there is anger. But to me, “transactional design” (the kind of design that can take a few hours to net a good product and doesn’t require a lot of consultation) is an inevitable casualty of the global economy and the evolution of the internet (see 99Designs).

It’s a Global Village Now

I was in India for 3 weeks last year and was STUNNED at the cost of labor. We rode in taxis for the entire trip and spent less on them than the 1 way trip home from the airport in Seattle. Talented tailors would throw in manpower of tailoring a shirt if you just bought the cloth. If it’s unfair to pay $500 for a logo, was it unfair for me to pay Indian market rates for a taxi ride (usually less than a buck or two)?

The $300 bounty for a winning logo design is a kings ransom for a young designer in most of India (and the rest of the world). Guess what, Western world? You’ve got to compete– and Walmart has taught us over and over again that consumers aren’t going to pay 10% more (much less the 1000% more that an onshore hourly designer would cost) just so they can feel good. Some of them will- but most of them won’t. We can’t put the genie back in the bottle here. You’re better off trying to find creative ways to compete than bemoaning the unfairness of it all– it’s like a cottage seamstress complaining about the existence of the new textile factory down the road– technology changes markets.

For a rural Indian designer, entering 10 contests per week and winning one for $500 might be a huge win (and he doesn’t have to write a single proposal!). And that designer might be damned talented. How different is this than a services business investing $500k in sales effort on 10 different $10m RFPs and ultimately winning one? In fact, isn’t this just a different sales investment/risk than costly networking, proposal writing, advertising, etc., etc? Heck, the designer doesn’t even have to issue a Net-30 invoice– 99Designs drops the money to the winner pretty instantly.

So I’m assuming that the gripe with design contests isn’t that people are getting paid LESS than they used to, but rather that they could get paid NOTHING even after expending the time and effort of producing a logo. Which brings me to my next point:

Whether you are a Business or Freelancer – getting paid requires that you risk time and money.

If you want paying work without spending time/money or taking risks, you should go find a job with a paycheck.

My first business (a technology consultancy) was CONSTANTLY investing staggering amounts of money and time to get customers…. We had sales guys, who made healthy base salaries and some commissions. We went to networking events to establish relationships with people who could be customers someday. We took existing clients to lunch to chat about projects on the horizon. We sent out custom holiday cards to every client every year to keep us visible. We built and maintained a web site with a rich and updated portfolio. We had snazzy business cards that had to be kept up to date. We had really nice business clothes for the clients that cared about such things. We cooked up gorgeous custom proposal documents for customers– and these proposals required considerable analysis work and consultation with the customer (spec work!). We even responded to RFPs sometimes (rarely). All of these efforts can come up empty, of course. Many of them did, but in aggregate, my business grew like gangbusters. Software is no different. I heard that Salesforce.com spends 60-70% of their topline on sales/marketing. Much of that is probably wasted, but I’m sure they are in a constant state of making their marketing spend more efficient (just like 99Design entrants are probably in a constant state of gauging the kinds of contests that will net them the most bang for their effort).

In short, getting paying work cost TONS of time, money, and risks (how many freelancers do you know who average 100% billability in a 40 hour work week over a year?).

If you are a fresh-off-the-boat designer (or a rural one), you should expect your costs and risk here to be higher than if you’re not. You’ll have to invest more and get less as you build up relationships, your skills, and a portfolio. If there are too many designers eager for work (as I believe there are right now– the design world is NOT growing as fast as were churning out design grads), the market is going to make this harder for you. Don’t like markets? Get a paycheck-job or go learn Ruby on Rails (then you can fall out of bed and land on 2-3 lucrative freelance offers).

The nature of design

The best work general comes from seasoned professionals who engage in a deep discovery process, run through a lot of iterations, and work closely with the client. That being said, you can see flashes of brilliance without all of this, especially in the world of “transactional design”. Some of the stuff on 99Designs is GOOD. For a logo, book cover, or smallish web site design (especially for a smallish business) the difference in value received between a $30,000 engagement and a $500 contest is not worth $29,500. In fact, the contest might (on some occasions) yield better results faster. Even if it doesn’t, it’s CERTAINLY faster and can help with brainstorming. From a purely economic point of view, rolling the dice with a contest is a quick experiment to run that might yield exceptional results. I could design a good from-the-hip book cover in a few hours and it MIGHT be great… Design can be random and certain design tasks are 90% inspiration and 10% perspiration rather than the inverse. The bigger the design project, the less this is true, obviously. Again, I think logos (for small businesses) is the sweet spot.

Supply & Demand

As a business, we try to be as fair as possible with vendors, but we’re in business to be profitable. If I look at the winning designs on 99Designs and I generally like them more as much as any designer’s portfolio, is eschewing the cheaper option really the way to go? Paying bottom dollar prices CAN mean that someone somewhere is being exploited. I’ve seen no evidence that the 99Designs designers are exploited however, though it’s obvious that there are designers with higher costs of living in the US who simply can’t compete on transactional design services.

If you answered “yes, as a matter of principal” to the last question, how do you feel about internships (unpaid or crappy pay)? How do you feel about buying sneakers that were made in a Chinese factory with awful working conditions (check your feet, please)? How do you feel about the fact that the average Google employee generates over $1m per year in revenue but gets paid less than 10% of that #? Shopping for the best dollar-to-value ratio generally means that someone gets a disproportionate cut of the wealth in the transaction (even just a little bit)… Though are Google employees really getting screwed? Is an Indian designer getting screwed if she’s pulling down $20k year on 99Designs? And where is the outrage about things like iStockPhoto? Or 99Designs’ Logo Store? Is responding to a clear need in a design contests for a speculative chance at pay really that different from a photographer tossing up a speculative photo on iStockPhoto and hoping that someone might eventually buy it? The ones that have great photos make a ton of money. The ones that suck probably need to take photography classes. Heck, is it really that much different from my startup, where I spent a big (expensive) chunk of my live to launch something hoping that someone would want to buy it? Isn’t a startup in the “spec-work” category?

Design contests are a meritocracy in the extreme– good designers can probably make good money and (with a track record of winning and a great portfolio), eventually graduating to less-speculative lead generation if they so desire (though I bet GREAT designers could net thousands a day on 99Designs). Bad ones don’t and have to seek other marketing avenues or other lines of work. Again, welcome to business. Given the huge number of designers that enter contests OVER AND OVER again, clearly many have decided that they’d rather roll those dice than roll the dice associated with RFPs, Adwords, hiring salesfolks and other lead-generation efforts.

These are just some thoughts. As a designer, I’ve never done spec work (unless proposals count– they probably should). As a business, I’ve never asked for it… But from either side of the table, I’m not sure I have an ethical problem with it. So from one (admittedly kinda mediocre) designer to the rest of you– how are design contests “damaging” designers beyond the way that Google News is “damaging” newspapers?

How to Ask for an Introduction

Mar 09

I don’t know a ton of important people. But as a founder of a venture-backed startup with some amazing investors and advisors, I do know a few.

With Nivi and Naval preaching the gospel of social proof (can I get an “amen”?!) and with fundraising posts and articles espousing the importance of introductions, it’s no surprise that about once a week someone asks me to introduce them to someone else. It’s especially common around Y Combinator Demo Day, where YC groups shift from pure product mania to fundraising mode. I’m pretty sure that YC tells new crops of startups to ask for introductions from the funded companies from previous sessions.

What does surprise me is how people ask for these introductions. Here’s pretty much how they usually read:

“Hey Tony. I’m [insert name] from [company name]. We’re starting our fundraising effort and I was wondering if you’d introduce me to [insert RescueTime investor/advisor].”

I usually will make the introduction, but the person asking for it is certainly not making the most of the opportunity (and asking me to spend my social capital by doing so). So after making a mess of these introductions in varied ways, here is my suggested checklist for making an introduction (it’s pretty much my reply when I get a request like the one above):

Write the introduction for me. Seriously. You know more about your story than I do. You know the things to say that will make someone light up. I don’t. I might flub it. I can personalize it (“Hey [insert investor name]- hope your trip to [offensively exotic location] was fun. Welcome back! Listen, I wanted to introduce you to…”), but you should make the pitch. Bonus: this saves me a few minutes of writing, which is kind and thoughtful of you!
Don’t bury the lede. What’s the thing that will get an investor excited? Be concise, but talk about social proof, traction, growth, size of the market, how badass your team is, mainstream press coverage, other investors who are on board, and user passion/joy. Choose whatever distinguishes your startup from the sea of startups that investors read about every single day. Unless your product is revolutionary, spend more time talking about your market (“we’re helping companies in the billion dollar widget maker market sell doodads”) and your team than your product (“we’ve got an ajaxy shopping cart!”). If they investor blogs or has EVER talked about their investment strategy, hopefully you’ve read how they think and tune your pitch to match that.
Heap on the social proof, man! Getting an email intro from a near-stranger (me) is about the weakest social proof you can get (but it’s better than nothing). Tell us how many other investors you have soft-circled. Give us a link to a list of all of the blog posts praising you. Or all of the users tweeting about you. We’re herd animals. If the investor feels like the herd is leaving him behind, that’s a good thing.
Think about why it’s an opportunity for investors. If I’m writing to an investor about a company that looks like a credible opportunity, that’s me doing them a favor. If you don’t have any bullet points that many you look like a great opportunity, that’s me doing you a favor and adding noise to their already overflowing inbox.
Keep it short. All of the above stuff could mean a lot of content. You’ve got to pick and choose what to send and hope it’s enough bait for the investor to dig in and learn more.
Bonus points: track it. When we were talking to investors, we created custom (private) pages for each investor we were courting giving them a ton more to dig through and get excited about if they wanted. The emails were short and sweet with a “want to learn more” link at the end. We used Google analytics to track which people clicked through and which individual pages they clicked on so we could know what to focus our discussions on when we met them.

All that said, if you’ve got a great investment opportunity (with a launched product and some happy users), don’t be shy about dropping me a line if I can help (with introductions or advice).

(post scriptum: If you are in the market for introductions, you should check out VentureHacks’ StartupList!)

(post post scriptum: If you’d like to learn more about making good introductions, Chris Fralic just wrote an outstanding post for the “connector” – The Art of the Introduction)

PR for Startups

Mar 02

My startup (RescueTime) has enjoyed some pretty ridiculously good PR (online, print, and video). It’s not a surprise that the most common questions that we get from other founders are about PR. How do you get press and the blogosphere talking about your product?

When you research this topic, you’ll see lots of technical and how-to articles that talk about how to build relationships with writers, how to use services like PRweb, how to format a press release, and more. In a lot of ways, this reminds me of SEO (search engine optimization). Research SEO and you’ll find a bunch of articles about page markup, link sculpting, meta descriptions, and all sorts of other mechanical processes. But what you won’t find much of is information that teaches you how to write great content and how to build your startup and features (from the ground up) with “linkworthiness” in mind.

Just like fabulous content solves 75% of your SEO problems, fabulous storytelling solves 75% of your PR problems.

I think there’s a lot of built-in contempt for PR and marketing among entrepreneurs (especially hacker-flavored entrepreneurs). We’ve all been in companies with fat communications budgets wasted by blow-hard marketeers, so many of us have dismissed the profession altogether. We’re so entranced by the concept that just building something people want will win the day. I remember cheering the first time I read the quote, “marketing is a tax you pay for being unremarkable“. I remember reading a statement on Hacker News that said, “my code speaks for itself“. Two years ago, I would’ve said, “Right on, brother! Preach it!”

But my mindset has shifted about 180 degrees over the past few years. I now believe that how you say something is at least as important as what you’ve built. The A/B testing and design/copywriting iteration that we’ve done over the past year (which has, over time, resulted in a 400% increase in conversion rate on our site) really has driven home this belief. What’s A/B testing if not a bunch of microscopic marketing/PR tests?

What you need to send to reporters and bloggers

If you’re reaching out to reporters and bloggers, you put yourself in the shoes of that person. They are looking to write a headline that causes readers to buy a magazine/paper or click on a link. They are looking to write a story to support that headline that causes readers to consume that content and (ideally) find the content so provocative (note that “provocative” can be VERY different from “valuable”) that they send the link to their friends and relatives, post it to Twitter, and write a supportive (or critical) write-up on their blog.

If you can truly empathize with a writer, you fairly quickly realize why your new social bookmarking app, web annotation service, or small business accounting app isn’t particularly newsworthy. You aren’t click-bait. You aren’t link bait. You aren’t going to sell a paper.

Which is why your most important problem from a PR point of view is this: How can you make your uninteresting (to a broad audience) company interesting?

The good news is that it’s quite do-able. If at all possible, read Made to Stick by the Brothers’ Heath. If you can’t read it, read this summary. If you can’t do that, just try to craft a story that succeeds in as many of these areas as possible:

Surprising
Funny
Personal
Has a story arc
Useful

(notice how low “useful” is on the list? That’s not an accident. You have to be REALLY useful to be worth talking about.)

A boring company with good storytelling skills can do some amazing things on this front. Off hand, I can name a company that sells shoes online that did pretty well on the PR front, a personal finance app that a lot of people talked about, and a creator of small-business project management software that people can’t stop linking to. If you want to see smaller/earlier successes, check out Balsamiq or UntitledStartup (both are doing some clever things out of the gates).

So if you tell your product’s story at a party (which you should, over and over!), watch the listeners eyes. Do they glaze over? Or do they light up? Do they laugh? Do they argue with you? Do they ask questions? If a you’ve never had a listener at a party say, “wait a minute– John over there would LOVE to hear about this… Let me grab him!”, then you probably aren’t ready to work on the mechanics of outbound PR. If at the end of your story, the listener doesn’t often say, “Can you tell me that URL one more time?” as they reach for their smartphone, then you need to keep working on your story. Because charging forward on outbound PR with a shitty story is pretty much the equivelant of working on your SEO mechanics when you know you have crappy content. Your’e ignoring the most important part in favor of the least.

Post Scriptum – On the Value of PR

Having enjoyed pretty great PR success, I wanted to throw out a final thought. Like a lot of accelerants (marketing and funding being two other examples), PR can be like throwing gasoline onto a fire. Or it can be like throwing gasoline on a pile of wet wood. It can be especially exciting if your business is enjoying growth already. But PR (and, more broadly, your startup) is a marathon, not a sprint. The first couple times you get a PR hit, you’ll quite likely be flummoxed by the fact that your traffic and usage doesn’t really change that much as a result. TechCrunch might get you 5-10k uniques. Being in the print version of the New York Times might get you a few thousand uniques. PR is not going to result in a viral/word-of-mouth explosion, but it’ll speed things up nicely if you’ve already got one happening.

As Andrew Chen says in one of his many fabulous posts (why bloggers and press don’t matter for user acquisition), if you’re going to spent time on marketing and PR, spend it on things that will pay ongoing dividends rather than 1-time dividends. Andrew was talking about stuff like viral loops and SEO, but in my opinion he missed the most important marketing “gift that keeps on giving” – crafting and tweaking a story that makes you worth talking about.

Design your Blog like You’d Design a Product

Feb 08

When I decided to take a weekend and focus on my blog I realized one big thing:

Most blogs are crappy products. And most of my favorite bloggers (the ones that espouse taking design, marketing, testing, and iteration have largely blown off the designs of their blogs To be clear, I think the quality of the blog is almost entirely measured by the quality of the content and not the theme. But blog success is a function of content quality and the ability to turn readers into people who retweet, comment, subscribe, or follow.

Success (whether it’s a blog or a product) is looks a lot like this:

Quality of Product * Success of Marketing * Conversion of visitors = Success

Certainly, outstanding bloggers (or outstanding products) can win on just quality of product. Some of my favorite bloggers (let’s single out Paul Graham (though I think he’d call himself an essayist), Dave McClure, Andrew Chen, and Eric Reis) have blog formulas that look like this:

(great writing = 10) * (great word of mouth marketing = 7) * (no clear call to action, no testing = 1) = 70 (pretty darn successful at expanding their influence)

(Note: McClure might get a -1 for too many font colors! )

My hats off to all of ‘em. They are better (and more prolific) writers than I. But we all know that a little A/B testing can go a long way. We’ve seen that a quick/dirty redesign of an already effective looking page can pump conversion by more than 20%. Hell, we’ve seen that a few iterations of Twitter language (leading to “you should follow me on Twitter”) can boost clickthru by 173%. Could a weekend’s (largely outsource-able) work double a visitor’s chance to become a follower/subscriber, comment, or even read a second post? If you’re starting point is a stock blog theme, I think so.

Here’s what I think you should do on a blog to maximize the 3rd part of the forumula above (and, to a lesser degree, the second part):

Toss in some social proof. Assume people don’t know who you are and make it clear who you are and why you are important. You’re establishing credibility– why should anyone read what you have to say? Take a look at VentureHacks if you don’t know what I mean. Well played, sirs.
Figure out what you want your visitors to do. Clearly, you want them to read your posts, but scribble out a stack-ranked list of the actions you want your readers to do and make sure your design supports that. If there’s crap on your blog that doesn’t support that (badges, widgets, etc) pull ‘em. Here’s my list:
1. Retweet! No way a blog is ever going to have a viral loop, but if a reader likes what they’re reading and wants to spread the word, that’s huge– so encourage it! 1 subscriber is 1 subscriber. A retweet means hundreds or thousands of potential new visitors/subscribers. If my conversion rate on other activities is meaningful, this is my post important user behavior.
2. Follow me on Twitter. This was a hard call to prioritize over RSS subsription, but I think a lot of people are turning to Twitter to replace their RSS readers. Feels like the right trend. Also, clickthrus on my posts on Twitter results in pageviews– it’s trackable. RSS isn’t.
3. Subscribe via RSS. Makes it an almost certainly that they’ll at least see my headlines henceforth
4. Subscribe via email. I dropped this to fourth because I don’t think most of my readership rolls that way, but it’s still a fine way to get content.
5. Comment. Other than the “game of blogging” (i.e. maximizing reach, influence, audience), the discussion is the big part of why I blog. Bonus points, discussion makes a post feel lived-in and heaps on some more social proof. I’ve ceded the UX of commenting to Disqus, who thankfully does a badass job of encouraging conversation. Further, a comment gives me a chance to talk to the commenter (I almost always try to reply– take a look at Neil Patel if you want an example of a fabulous blog post. He always replies).
6. Read a second post. In this world, I think getting someone to read a whole FIRST post is a great achievement. If people want to read more, I want to help them do that. But, heck– if they like my stuff, subscription/following on Twitter seems much preferred for both parties as a primary call to action.

Now maybe you could argue that a blog shouldn’t be treated this way. Maybe we’re all blogging to express our feelings, hone our writing skills, and be part of the conversation. That’s fine if that’s true. But look at the degree to which blogging has been instrumental in the careers of folks like the ones I’ve mentioned (as well as Fred Wilson, who says much of his deal flow is because of his blog) and it’s pretty hard to argue against trying to make your blog an effective funnel. Hell, at least spend a few hours and pluck the low-hanging fruit.

At the end of the day, every web site is a funnel and most blogs are pretty damn leaky. Take a weekend and plug some holes.

Startup Founder Evolution

Nov 15

In the past two months I’ve been on two different panels with other entrepreneurs. The first was at WTIA in Bellevue, WA (“Cashing in on Web Services“)– the other panelists were very clearly what I’d call “business entrepreneurs”. All of them had relatively successful funded startups, but not a one of them had probably written a line of code, moved a pixel, wrangled a server, or written a line of copy in months or years (some probably never had).

In contrast, the most recent panel I was on (at the O’Reilly Web 2.0 Summit) was with what I’d call “builder entprepreneurs”… All startups with great traction, some funded, but all of the founders were directly engaged with the creation of the product. They designed, coded, played sysadmin, and played all sorts of other production roles for their startups.

The contrast was startling, and it made me think hard about my earlier contention that the “business guy” doesn’t really have a useful role to play in the very earliest stages of a software startup. The first panel had a pile of examples of business guys leading startups to some significant (sometimes dramatic) success.

At one of the other panels at the Web 2.0 conference, Dave McClure (master of 500 hats and 473 font colors– and one of the smartest guys in the game) summed up the life-cycle of a startup in a great way. “There’s the product development phase, the market development phase, and the revenue development– or revenue optimization– phase.” Rings true to me.

So with this in mind, let’s track the value of a “product entrepreneur” over the early life of a company:

Now let’s track the value of a “business entrepreneur” over the early life of a company:

(note: I’m talking about one person’s ability to make a major impact with a startup– I’m not saying that either person is useless at any stage of the startup… And, of course, exceptions abound)

As I’ve said before, the business guy often doesn’t have a lot to do in the early stage of product development– especially if the builders are building something that they actually want themselves. If you’re a bunch of hackers building a simple photo sharing, you don’t need a business guy telling you what the market wants. Of course, if you’re a bunch of hackers building business time management software, you might well need that. Your mileage may vary.

But what I haven’t said before (and what I’m coming to learn) is that the product entrepreneurs have an increasingly marginal role as a startup evolves and becomes more successful. In fact, I’d argue that they are in a rude awakening– they either need to evolve into business entrepreneurs (as Gates and Jobs did, for example– both shrewd business guys) or hire people to play that role (a la Eric Schmidt at Google). Building an asset is the first (and most important) challenge. But finding the customer for that asset and maximizing the revenue/profit is also a challenge (and one that many builders are ill-suited to handle).

It feels like product entrepreneurs are oftentimes “cowboys”. Flying by the seat of their pants, they rally a small team to build a product that people want. It’s no surprise that this is really freakin’ hard and requires a mythical combination of brute force time and effort, insight, customer empathy, and a huge pile of luck. Saddling the product team with a biz guy who chases big customers and locks in the product direction too early can be deadly, as the Wizard points out:

This is one reason I hate to see very early stage companies sign a big customer before the product is baked. You are encumbered by product commitments and customer support before you truly know what the market wanted. You have to be passionate about a customer and the product when you should be laser focused on the product. The customer’s needs and your goals vis a vis the market may diverge. In an effort to show progress, however, the marquee customer is attractive in the belief it will help attract investment (and this may indeed be true). In a previous life before FeedBurner, my founders and I made the mistake of signing a big name customer to a paid monthly contract before we really knew what the product’s place in the market should be. Won’t ever do that again.

The product development phase of company needs product development people and precious little else.

But as the market development phase sets in, builder entrepreneurs are oftentimes increasingly obsolete. It’s no longer time to hurl features willy nilly at your users– you’ve already built something that they like. No you need to measure the hell out of it and turn it into something that they love. You need to iterate on it and turn it into something that confuses 4% of your new users instead of 7%. It means finding a way to tune your viral loop and conquer your SEO enemies to increase the organic flow to your product. And you need to start expoloring the market to figure out who they hell is going to pay for all of this. That means crafted adwords campaigns. That means cold calling. That means price experimentation. That means exploring the world of direct ad sales. Well, it can mean all sorts of things, depending on whether you are a free web service, a freemium product, a pure b2b play or some combination thereof.

But you are firmly out of the world of building products and drifting into the world of iterating a product and exploring a market. And, likely, you’re in the world of sales, marketing, and instrumenting the hell out of your app/site.

As Papa PG says, if you look at the leaders of successful tech companies you see more CS degrees than you see MBAs. That makes sense– geeks are critical to conquer the first (and most important) problem of a startup… Building a badass product. But if you look at these same tech companies, you see CS geeks who’ve actually set aside their geeky roots (though maybe not their geeky instincts) and become very very shrewd business guys. And you also see inferior products kicking the crap out of superior products through better sales/marketing/and distribution.

So to all of you builders out there… Beware! When you reach a challenge in the evolution of your business, the most natural thing in the world is to frame it as a product problem. “If we just build this new feature/product, we’ll be off to the races and we’ll never have to do any of that business crap!”. Keep your eyes peeled for the time when you have to personally evolve and start tackling business problems, or step out of the way and let someone else do it for you.