Startups

I just gave myself a $18,642.80 Raise

Aug 13

People don’t always directly associate expenses and income, and very seldom calculate taxes when they do. Here’s how I gave myself a $18,642.80 raise with a few phone calls and a craigslist ad. Your mileage may vary.

I called Comcast and asked them to cancel my landline phone and cable TV (retaining Internet). They offered to cut my rate to let me retain all three services. I declined. They offered an even lower rate. I accepted.
Total Savings: $1080 per year.
Total amount I’d have to earn at a 33% tax rate to earn that money: $1436.40
I called the Seattle Sailing Club and canceled my membership. I love sailing, but at $200/month I wasn’t using the boats enough to justify it. There are hopefully places around town where I can rent boats from time to time, but I’ve also got a few friends with boats who invite me from time to time, so I’ll likely get my sailing fix there.
Total Savings: $2400 per year.
Total amount I’d have to earn at a 33% tax rate to earn that money: $3192.00
My wife and I made a commitment to eat out more at our cheap favorites and limit our extravagant favorites to once a month. Our favorite cheap-eats places have outstanding meals and we’re always delighted to go there. Also on the plus side, this make the extravagant favorites a slightly more special experience.
Total Savings: $2160 per year (replacing 3 $100 meals with 3 $40 meals per month)
Total amount I’d have to earn at a 33% tax rate to earn that money: $2872.00
I’m selling my sportscar. I’ve got a bit of cash in it and have been paying $600 a month (to pay down the principal faster). I don’t get a ton of joy from cars, and can’t find a way to justify owning an expensive one. I’ll be buying a cheap 4-door sedan with the cash that I get from selling the car. While most people don’t have a $600 car payment, most people DO pay monthly payments for a nicer car than they could afford with cash. There are plenty of reliable vehicles for sale– why pay a monthly premium just to have a shinier and newer vehicle? If you get a lot of joy from cars, of course, this might be worth it. But how many great family vacations could you buy with this money?
Total Savings: $8377.44 per year (payment plus estimated insurance for comprehensive coverage and a more expensive vehicle)
Total amount I’d have to earn at a 33% tax rate to earn that money: $11,142.00

As I said before, your mileage may vary. The point of the exercise (for me) was to look at all optional recurring expenses and do an honest analysis of just how much happiness and satisfaction they generate when compared to the cheaper alternatives. The changes above don’t substantively change the quality of my life and bring me that much closer to my goal of having my passive income (from real estate, investments, etc) cover my life-expenses. It also, as an entrepreneur, frees my money up to invest in more interesting (and potentially lucrative) things.

Do Designers deserve a “seat at the strategy table”?

Aug 01

One of my favorite “design” bloggers out there is Josh Porter of Bokardo. In his most recent article, Josh contends that “designers need a place at the strategy table because their work depends on and is a direct result of it. If it’s not already, realizing the business strategy of the organization in an interface should be the designer’s primary job description.”

If you’ve ever given a designer a “we’re happy with how it works, just pretty it up” job (whether it’s a web site or a word doc), you need to read this article. Preferably right now (I’ll wait).

Unfortunately, I think Josh is overestimating both strategists ( “…off using terms like “conversion”, “user-generated content”, and “ROI”” ) and designers ( “…opining about “grid-based design”, “cross-browser rendering”, or “web standards”” ).

I’ve thrown out the idea in the past (and it tends to piss off a bunch of web designers): stunning visual design (as most people define it) isn’t very compatible with usability and usually only a coincidental relationship with lofty things like “business strategy”. Designers’ brains (and the brains of the people who hire them) simply aren’t wired that way.

Don’t believe me? Take this simple test to see if you’re thinking about design in the wrong way:

If you’re a designer: Open up your portfolio. If you don’t have a portfolio, pull up a mental picture of the last one you had. What does it look like? Lots of screenshots, no? Next to each screenshot, do you talk about the business goals of the client/employer? Do you talk about how the design performed after launch? Do you know how the design performed after launch? Do you CARE how the design performed after launch? Answer that last question honestly– of COURSE you care how it performed, but was acquiring that knowledge a higher priority for you than your next pixel-slinging / xhtml-wrangling task?
If you’ve hired a designer: Look at the last time or two you’ve hired a designer. What type of person did you hire? Why did you choose that designer over the alternatives? Did you ask about business strategy? Did you ask about post-design performance metrics?
Bonus question for non-designers: Have you ever thought or said, “If I was only better at Photoshop and/or Illustrator and/or XHTML/CSS/JavaScript, I could do this myself.”?

Maybe– hopefully– you are the exception to the rule.

What stands in the way of making things better?

Unfortunately, things aren’t likely to change soon. There are a few attitudes that stand in the way:

Designers need to stop thinking and acting like artists and start acting like scientists. I’m honestly not sure this is possible.
Non-designers need to stop thinking that they are good at crafting user experiences. Don’t get me wrong– they should certainly have an opinion, voice ideas, express concerns, etc. I’m not saying that they should shut up and let the expert do their job… They just need to realize that it’s possible to BE an expert.
Everyone need to be willing to sacrifice pretty and sacrifice “cool”. At my last job (the only time I haven’t been self-employed in the last decade), the product team united around a user experience to create a public “resume”. It was a gorgeous multi-step experience with a few inline “wizards”. Users could edit their public profile after the fact in a seamless inline manner while viewing their profile (imagine lots of “edit” links next to editable data). The team loved it. The CEO gushed. The designer was proud. The users, however, were confused as hell.
Non-designers need to hire designers with the right attitudes and reward the right successes. If both parties think the designer’s job is done when they hear, “Wow– that’s beautiful”, then there’s a problem.

I love pretty much everything Josh is proposing, but I’ve only met a tiny handful of designers who have the discipline to purposefully make something LESS PRETTY and LESS COOL to make it more effective. And I know even fewer product managers who have the discipline to ask them to.

Facebook and Misaligned Goals

Jul 29

Facebook’s goals and your goals (as a Facebook user) are starting to get misaligned. And it’s only going to get worse. I’ll come back to this in a sec.

Alan (former VP at my previous employer) has left Facebook. He brings up a lot of cogent reasons why.

For myself, I am a bit frustrated with Facebook. I receive a pile of “notifications”, “facebook mail” and (increasingly) “sponsored crap” every week, quite a bit of it quite deceptive in its desperate bid for virality (yeah, I know virality isn’t a word). Notes that say “John would like to see what you’re reading”, “Bob wants to know what your stripper name is”, and “Alex has posted some . Click here to view them!”… All of these things lead straight to the “install this app” screen that I’ve visited a hundred times.

We’ve all done it. Responded to these “personal” invites as if they really were personal invites (I have 6 iLike invitations from people who I’m SURE aren’t really that interested in getting me to use iLike), installed the application only to remove it a week later when you realize it doesn’t do a damn thing that actually adds value to your life.

I’d like to find the setting in Facebook where I can check a checkbox that says, “I would like to find what applications I want to install on my own, thank you!” (Can you find that option in the picture below? Am I missing a setting somewhere?)

So back to misaligned goals. One of my problems with free consumer apps is that the goals of the business are virtually NEVER aligned with the goals of the user. In the beginning of a startup (like Facebook), this doesn’t come into play. The business is 100% focused on adding value to the user. The user wants to get stuff done (share ideas, photos, communicate, whatever) and the business is desperately trying to help them reach these goals as effectively as possible.

Unfortunately, pretty soon the business runs out of easy ways to add value for the user. The growth curve slows down, and you start hearing people on the product team saying, “We want the users to…” more than “Our users want…”. And it’s about this time that investors are starting to look at the burn rate and wonder how the business is going to extract value from the user. With free services like Facebook, you have a few options… I’d imagine that they’ve functionally killed their virtual gift business by releasing a public platform like they have. So that leaves advertising or premium services. Unfortunately, I haven’t heard a whisper of premium services from Facebook.

The funny thing is, users really aren’t too keen on advertising, no matter how targeted they are. And with a high use-per-day app like Facebook, they become downright invisible to the users. Quite a few people have noted that FB advertising is pretty painfully ineffective. Which means that the business needs to make ads more plentiful, more invasive, or more expensive… All of which have pretty serious negative ramifications for the user. And because EVENTUALLY there is a drive for constant revenue growth at consumer facing web startups, where else can they turn? Of course, you could argue that Facebook, with their new ad platform, have a better understanding of their users that just about anyone (in terms of demographics and intent)… But between the ad blindness that is a huge problem on utility-style apps (when was the last time you read an ad in Gmail? How about clicked on one?) and because Facebook is built on trust of your NETWORK, I think the “but Facebook advertising can be sooooo targeted!” argument doesn’t hold up.

Take any free consumer site that’s more 5 years old and you see how ugly this slippery slope can get. Interstitial ads, Flash ads that obscure the content of the site, pay-per-click garbage, and more. If Facebook doesn’t start looking in other directions, this is where they’ll be in a year or two– trying to manipulate their users into clicking on (or viewing a lot of) ads.

The SEO marketing factor that no one talks about

Jul 26

Just read a great piece on Small Business Hub about SEO entitled Stopping The Google AdWords Morphine Drip: How We Saved $183 Last Week. These guys echo a sentiment that I’ve been expressing for a long time (and just posted about a few weeks ago)… Investment in SEO is virtually ALWAYS better than investment in Adwords/PPC.

Mike’s article boils it down beautifully. The search phrase that he cares about is “Internet Marketing Software”. Buying a click for this phrase costs about 7 bucks. Having managed to SEO their way to the #6 slot on that page, they got 25 visitors in a week. So, by investing in SEO, they’ve managed to get $700 in PPC value FOR FREE. I’d also imagine that searchers have a bit more inherent trust for organic search results than ads. So, if Mike’s visitors were buyers, I imagine they’d convert a bit better than their PPC brethren.

One of the things that Mike doesn’t talk about in the article (tho we chat a bit about in the comments) is the EFFECTIVENESS of what you’re presenting in the SERP (search engine result page, for you SEO noobs at home).

This isn’t uncommon. Having read a lot of Mike’s articles, I think he’s a rare SEO guy who actually thinks about it from more traditional angles. But most SEO people are very analytical people. They are looking for systems and formulas that allow them to exploit Google better than the next guy. There are degrees of evil here (referred to as “white hat”, “gray hat”, and “black hat” tactics), but they are all variations on a theme– getting Google to perceive your importance as very high in the keyword-spaces that are important to you.

So on to the point of this post– SEOs are so damn focused on getting in front of a ton of eyeballs that they often lose sight of the next critical step– putting something in front of them that inspires action. Pretend you hired an advertising firm to promote your new soft-drink. As you tip back your scotch and soda one evening (that’s what fatcat soft-drink executives drink, right?) you see a commercial on the TV for your product. You look on, horrified, as bizarre images move across the screen. The lighting is bad, the camera work is terrible, and it’s not even clear what product the commercial is about. The next morning, you call up your agency and demand an explanation. Their response: “Yeah, we saved a TON of money on production– but the good news is that we spent the savings on more ad buys! That commercial was seen by millions more people than if we’d blown all that money making a great commercial!”.

The (somewhat meandering point) I’m trying to make here is that you have a few hundred characters to make an impression and inspire action (the click), and you aren’t going to do that by seeding your listings with a jumble of keywords.

So let’s take a look at Mike’s listing.

Search Engine Listing Example (Google SERP)

Not too shabby, but it certainly isn’t inspired marketing copy. A lot of product people feel feel that marketeers are manipulators and that you should just present the facts. The fact is, you can be certain your competition isn’t thinking that way. And surely you’ll agree that you can present the same facts in different ways that result in some pretty different reactions. For example (my favorite– apologies to Robert Heinlein), would you rather have a nice, juicy steak or a muscle tissue sample from a castrated bull? If you’re still not buying it, I suggest you read the studies profiled in the book Made to Stick… You’ll be floored.

The realization that your SERP presentation is so critical is unfortunate. With most user experiences, testing is easy. With SERPs, testing is damn challenging. Changing your title and meta description is easy to do… But Google doesn’t re-index your site THAT often. And a bad change can have very real consequences to your traffic (and your revenue). Testing 5 good ideas could take weeks or months. I would love to hear any ideas on how you can test in the comments.

One idea that I have is creating a faux-Google experience. Create fake Google search pages with fake results that are presented when someone clicks on the search button (with maybe a few pages of results). Then get some test subjects in your target market in and ask them to search for your term and select their vendor based off what they see. Not only would you get to see which of your SERP ideas fly well, but you could also see which of your competition performs well. It’s about as expensive as a usability test, but I think the value would exceed the cost.

Of course, the herculean challenge here is that you don’t have free reign to create copy that sings. You have a tiny title, a little snippet (meta description) and no control over presentation style. And, most importantly, you have to be darn sure that the extra clickability that you create by optimizing your SERP content doesn’t cost you in the rankings game.

RescueTime Blog

Jul 05

Brief note to let my dear readers know that we’ve set up a blog for RescueTime. Right not it’s not that active, but will eventually contain lots of interesting things that we can learn from our anonymous users. By asking them a few questions, we’ll be able to look at how productivity differs by gender, age, industry, and more.

For now, we’ll tide you over with a long-n-wordy case study on our permissions marketing campaign and a link to my appearance on Dave Mason’s syndicated radio show. Good fun!