I’ve been running WordPress for this blog since the beginning. It’s a great platform. I’ve officially been drinking the Kool-Aid. I tell my friends about it. I heard Matt Mullenweg speak (at SXSW last year) and I rave about that.

So when it made sense for us to spin up a little blog for RescueTime (my fledgeling time management software business), Wordpress got the nod. Rather than host another WordPress blog, I opted for a hosted WordPress account. WordPress offers barebones options for free, but I opted for a few premium options, making me a paying supporter of WordPress. It felt good.

The other day, I got an email from a few strangers telling me that the PowerPoint deck I had posted on my most recent blog entry (“DIY Web Marketing: 16 Resources for SEO, Social Media Marketing, & Viral Marketing”) was a dead link. It HAD been working (I know several people who downloaded it). No big deal, I thought. Tech glitches happen. As a guy who runs a SaaS biz, I’m quick to forgive on such things. It was inconvenient timing though– I’d just had a speaking engagement at Seattle Tech Startups and the PowerPoint deck in question was my deck for the presentation (I’d promised at the end to make it available– which is why I was getting peppered with emails).

My first step was to log in to see if I could fix it myself. No go. In fact, I couldn’t even log in. It told me my account was suspended.

I dutifully researched their message board (I know how expensive support is, so I figured I’d try to help myself) and found that random/accidental suspension issues were occuring as a result of a recent bug. Ahhh– that made me feel a bit better. When I finally got an email response, I was dismayed.

Your blog was suspended because it violated our ToS.
Basically, we don’t allow blogs created solely for commercial purpose,
or for Search Engine Optimization purpose.
I’ve temporary unsuspended your blog, so that you have a chance to review our ToS,
and clean it up a little bit…

www.wordpress.com/tos

Trying to keep my cool, I replied:

What?

It’s a blog about a tiny web service with 8 or so posts (so far). It doesn’t have any advertisements or any revenue generation capability whatsoever. I mentioned SEO in my last post because I did a little presentation at SeattleTechStartups.com a few weeks back– but RescueTime (http://www.rescuetime.com) has nothing to do with SEO (and, at present, isn’t even remotely a commercial enterprise). I reviewed to ToS fairly carefully and see no violations.

Are you SURE it was purposefully suspended? I’ve read several threads (covering the last few days) that seem to indicate there is a bug going around:

http://en.forums.wordpress.com/topic.php?id=16792&page&replies=5

http://en.forums.wordpress.com/topic.php?id=16787&page&replies=10

It seems a heckuva lot more logical to me that I’m a victim of this bug… I assume that if someone shuts down a blog for a breach of ToS that it would have some sort of note attached to it (to discriminate it from a bugged account)?

Several days have passed with no response. I have no idea if my blog is temporarily not suspended, if it was a bug, or if there truly was a breach that I’m not aware of. The blog is a simple product blog (I know a lot of startup guys who have such a thing– presumably that doesn’t count as “commercial purpose”?). I understand that suspending blogs is something WordPress has to do to be vigilant in the fight against spam, but would an automated notification hurt, citing the ToS clause in question? Given that I was actually a paying customer (not just freeloading off of their free offerings), would it kill ‘em to respond to my last email?

For the record, the blog gets VERY little traffic (thousands of uniques a month is all).

WordPress will continue to be my blog platform of choice– I’m too darn used to their fabulous interface. But (if nothing changes) I won’t be spending money with them again and I certainly won’t be recommending them as I have in the past. As they say, “customer service is the new marketing“.

Awesome quote shamelessly pulled from TechCrunch (I’d link to their Crunchbase entry if I could), who shamelessly pulled it from Yossi Vardi, who shameless pulled it from Theodore Roosevelt:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

This really resonated with me in light of the public (and anonymous) attacks on Jason Goldberg (CEO of Jobster) on the Seattle PI blog. I make no bones about the fact that I wasn’t always supportive of Jobster’s (or Jason’s) strategies. But the guy deserves credit for making a run at it (and I wouldn’t count Jason or Jobster out of the game yet!). He also deserves a ton of credit for getting an entire industry to look at Jobster to save online recruiting… If it turns out that Jobster doesn’t save online recruiting, there’s a small army of people who should step up and share part of the blame (including myself). Scapegoating is just stupid.

In the last few weeks, I’ve had a rash of opportunities come my way via email (the majority of which were job opportunities from 3rd party recruiters, but there were also 2 different co-founding opportunities)… It occurred to me that politely responding to offers that were clearly a bad fit was fairly time consuming. I don’t know if it will do any good, but I whipped up a page detailing the kinds of things that interest me.

Incidentally, this is tangentially related to a feature that I always advocated for at Jobster… The “what I want” part of the online resume. In times past, resumes were sent directly to employers didn’t need this. If I send you a resume, the “what I want” portion of it is generally the “objective” (“To find a position that gives me the opportunity to grow professionally blah blah blah”). As the resume has evolved into something more generalized that you post publicly and then wait for the opportunities to roll in, it seems like it needs a more expanded section detailing what opportunities the job seeker really wants.

For the record– I’m NOT a job seeker. I don’t want a “job” (though I suppose I’d jump at the right one). This site isn’t a resume (but it has enough resume-esque information to suffice), so I figure I’d add a page that details what sort of offers I’d entertain.

What do you think? Dumb idea? Will it fend off recruiters who aren’t sharp enough not to offer me entry level .NET coding positions?

Tomorrow evening I’ll be speaking at the SeattleTechStartups meetup (starts at 6pm– click the link for details).

The topic will be “Bootstrap Marketing for Web Startups: SEO, SMM, and Viral Marketing“. For the uninitiated, that’s Search Engine Optimization, Social Media Marketing, and Viral Marketing.

If anyone has anything in particular they want me to chat about, feel free to drop me a note (or leave a comment here). I plan to post the PowerPoint Deck and a “Related Links and Resources” page afterwards (which I’ll make available here as well).

Hope to see you all there!

During my tenure at Jobster, I never got to do what I had set out to do with Jobby– create a tool that small and medium businesses could use to make hiring people less of a pain in the backside. I don’t blame Jobster a bit– with $48 million in venture capital, you have to swing for the fences and go where there are vast piles of money to be had… Which means you start at the enterprise level and work your way down or start on the consumer level and work your way up (Jobster is doing both!).

When you have $0 in venture capital, the same rules don’t apply, however. I think there is a really serious need for software to serve companies in the 5-200 employee range– companies that don’t have the time or the budget to endure the painful ATS market that’s out there right now.

That’s why I was glad to see that Kirkland Rails God Ben Curtis has been building some snazzy recruiting software between his consulting gigs. I’ve seen a sneak preview and it looks SHARP.

If you’re a hiring manager (but can’t stomach the complexity and cost of the ATS scene), head on over to CatchTheBest and sign up to hear about the launch!

I’m going out on a limb to say that the future of cold-calling (and unsolicited offers in general) is pretty bleak. Which gives me great joy.

On one hand, unsolicited sales is getting cheaper, easier and (for a while) more effective- volume is going up.

On the phone front… With powerful CRM systems, companies can easily measure the success of cold calling and optimize it. Want more sales? Add more telemarketers. Run out of people to sell to? Buy a database in a new market segment. Sell to the same people again with a different pitch. With banks of low cost people who can call dozens of people per hour, you can see great success.

On the mail front… Digital printing is getting ridiculously cheap and companies have nailed the art of cost effective bulk mailing. Mailing lists are plentiful, cheap, and well targeted.

On the email front… Well, we’re all familiar with spam. And, of course, it’s pretty easy to send lightly customized emails to potential clients in a more manual way, liberally copy-pasting blocks of text.

Heck, even in the world of recruiting you see it. 15 years ago, applying for a job was a fairly careful and laborious task. You bought fancy paper, carefully crafted your resume, and often hand-delivered it. Now people can apply to dozens of jobs in an hour. Not qualified for a job? Who cares– it costs you nothing to apply. Fire and forget!

The problem with spam being so damn easy (whether it’s on the phone, in the mail, or on the intertubes) is that the volume gets high enough that sifting through these offers is no longer an effective way to spend your time. Essentially, it’s banner-blindness outside of your browser. Cold callers and marketeers are training us to flip our “ignore” switch as soon as we detect direct-marketing. So how do you know what to buy? Who to hire? Which non-profit to support? That brings us to…

Search is getting damn good, and social networking is actually getting useful

Years ago it was actually challenging to find vendors with a specific product/service. You could crack open the Yellow Pages and hunt around for the appropriate heading that you’re looking for (“Web Development – See Internet, Web Development”) and… at that point you have a list. No way to know if the vendors are good, bad, cheap, expensive, ethical or evil. You could try to network your way to a referral, but that was a bit of work, too. You could make a few calls to trusted colleagues/friends and see if they had any recommendations, but oftentimes they wouldn’t.

So, when the phone rang with a telemarketer, why the hell wouldn’t you buy from them? They’re just as good as your list of unknown vendors in the Yellow Pages. Add ‘em to the list, hear them out, get a bid/quote. Can’t hurt, right?

Nowadays, Google makes finding a vendor easy (or at least easier). Do a search, get a list. You’re done. No 40 pound book (I just dumped my Yellow Pages in my recycle bin the day after I received it- unopened). And it’s a bit more democratic– no longer is the vendor list sorted by who can buy the biggest ad, and no longer is the content controlled exclusively by the vendor. The TRUTH about the vendor (whether it’s good or bad) is becoming more readily available.

Enter social networking… With Twitter, Facebook, and LinkedIn answers (near as I can tell, the only useful piece of LinkedIn), I can ask ANYTHING and get trusted responses. A few months back (at my previous job) I asked on LinkedIn if people knew a good web development firm in Seattle and got about 20 responses… Many from people who I had actual relationships with. If you come up empty in your network, you can always drop in at Craigslist or Yelp and ask for recommended vendors from people who have first-hand experience working with them.

Mix it All Together and…

I just got a call from a very polite telemarketer selling technology outsourcing services. I told him I didn’t need any. He asked (as any good salesperson would) if it would be okay to follow up in a few months. I started to say, “Sure, can’t hurt”, but reconsidered. “Harry, I’ll be honest with you,” I said. “If I need your services in a month or a year, I’m going to give my business to someone that my friends and colleagues recommend. If I can’t get a recommendation, I’ll research it on the web and pick a vendor. If you want my business, my best advice would be to do great work for people in this town so that when I do start asking around, your name comes up.”

I think more and more people are thinking this way (even if they aren’t saying it). Between the deluge of marketing we’re getting bombarded with and the ease with which we can find a trusted vendor, I have high hopes that cold-calling (and Yellow Pages with it!) will meet a quiet death in the next decade or two as these tools and ideas find their way into the mainstream. If we can pull that off, then customer service (and product quality) will truly be the new marketing.

(Tony’s note: this post is a guest post from a friend who shall remain nameless)

Two years ago our corporation was sued by a larger company over trademark infringement. My business partner and I have chatted post-mortem about the experience many times since. I thought I’d try to document and share the lessons we learned in the hope that it will help other small startups who encounter the wrath of a bigger fish.

One morning we were milling around the house. My wife checked the mail – she’s the organized one – and saw a letter on a fancy envelope that looked like a law firm. She opened it and it was a cease and desist notice from a law firm telling us to stop using our company name and to hand it over to them.

Big Mistake #1:

At that point I called up a law firm who’s domain name was something like ‘domainnametrademarklawsuitlawyerattorneyguy.com’. I found him via Google (obviously). I had a chat over the phone with the guy and didn’t get much useful information but he was happy to take my money. He was very reasonably priced – he offered me a package that included a response letter and some basic negotiation for what most law firms bill per hour.

Big Mistake #2:

He sent me the first draft of the response letter and it was a letter that suggested we’d go belly up without a fight. I called him back. I still didn’t get much legal advice. But I told him to go out and buy himself a spine and rewrite the letter. So he did.

The letter came back fairly aggressive and my thought was that we’d let these guys know they can’t just push us around.

When I eventually got a good law firm working for us (more on that in a moment) my new trademark attorney couldn’t believe we sent something that aggressive to them. It set a very bad tone for negotiating.

Big Mistake #3:

After having my $2 attorney send opposing council a f***k you note, I decided to call them up. The CEO wouldn’t take my call but referred me to his attorney who I learned from the receptionist was a litigator and was on permanent retainer. I also got the impression he was based on-site. I got the litigator on the line and laughingly asked him if he thought his case actually had any merit. He said he did. The conversation quickly ended.

Later I got several calls from the CEO himself. Instead of referring him to my attorney, I got chatty with him too.

I had succeeded in making the case personal.

Big Mistake #4:

After a few weeks I got rid of domainnametrademarklawsuitlawyerattorneyguy. I posted a message on a webmaster business discussion forum and made contact with a very competent and reasonably priced trademark attorney based in SF.

Even after retaining a great law firm to deal with this, the only knowledge I was gaining about the case and trademark law was through osmosis from my attorney. I never bothered to gain a deep understanding of what I was up against.

We went through weeks of negotiating via my new attorney trying to undo the damage my previous attorney and I had caused. She did a spectacular job but we were still drafting motions and steadily heading to court.

If I’d done my homework quickly and understood what we were really up against I would have done whatever I could to bring this thing to closure much sooner.

Closure

I wont bore you with the details of how this played out and confidentiality agreements prevent me from sharing the interesting details with you. But at the 11′th hour I repaired my relationship with the plaintiff’s CEO sufficiently to talk a deal.

OK children, what have we (I) learned?

1. When you receive a cease and desist notice, take it very seriously because it may be the beginning of a very long and expensive lawsuit.
2. 2. Find a very good attorney who specializes in the relevant field. Don’t go for a big name law firm. Preferably find someone who was working for a big name law firm and recently started their own practice. You’ll get big name experience and someone who is lean and hungry – and reasonably priced. Many attorneys are happy to spend an hour with you on the phone for free chatting about your case. Use this hour wisely and you can get a ton of free legal advice. Set up conference calls with as many law firms as you can and get lots of free hours and a free education.
3. Go to school. Drive down to your local Barnes and Noble and start learning as much as you can about the problem you’re facing and the claims that have been made against you. If you’re an entrepreneur this won’t be a problem because you’re used to absorbing fantastic amounts of information in short periods of time.
4. Lawyers are notoriously shy about responding to direct questions like “Should we settle or should we go to court?”. It’s in their nature because they’re worried about getting sued. They’ll simply present you with the facts and leave the decision up to you. But if you have a good working relationship with your attorney, ask them this question and keep pressing and they’ll probably give you some advice off the record.
5. Take any advice you get from an attorney in context. If they’re a litigator, they’re just itching to battle it out in court. Even if they aren’t, if you choose to fight it means they’ll get to draft fun motions and make exciting filings and do what lawyers do. And of course they will generate many many billable hours and while many lawyers defy their field’s reputation and are in fact well meaning good people, it’s tough to turn away tens of thousands in billable hours. That’s why you need to learn as much as you can about what you’re up against and make your own decision.
6. NEVER EVER call up opposing council directly and NEVER NEVER NEVER EVER call up anyone who works for the company that’s suing you – especially the CEO. No matter how many times dad told you to deal with issues like this man-to-man, don’t do it. You’ll risk turning this from a cost-of-doing-business issue into a personal proving-a-point issue. The only reason I negotiated directly with the opposing CEO when settling was because I’d already made it personal and had to repair the damage.
7. Make sure you don’t take the fact that you’re getting sued personally. One of the things I learned is that companies who own trademarks are obliged to enforce their trademark rights or they risk losing them. The company you’re dealing with may have no choice but to ask you to change your name – or take whatever legal action they’re taking.

When making your final decision about whether or not to comply with the demands of the C&D, or whether or not to go to court, consider this:

After doing all your research you may still be unsure about whether or not you’re right and they’re wrong. Make the decision a financial one. Look at your company’s revenue and how much you would lose by complying (changing your name in my case). Then look at the cost of litigation if you went to court.

If you’re just starting out it’s very likely that you’ll make the decision to avoid the legal bills and get on with your business.

If all your research tells you that you’re in the right and the financial data says you should fight the good fight, then go for it. But know that it’s going to take a long time and it risks demoralizing the management team and staff if they’re not shielded from the process. View it as a simple cost of doing business, don’t discuss it with staff unless you have to and get on with building a successful business.

What we do now to avoid tradmark lawsuits:

I wrote this in the hope of providing some general advice on dealing with early stage lawsuits, but here are a few tips to help you avoid getting sued over trademark infringement specifically:

1. Do a search on USPTO.gov for your future name using their trademark search engine
2. Do a simple Google search for your name. The best names I’ve found have 2 or three results come up and usually it’s someone’s nickname on a discussion forum used years ago or something inconsequential like that.
3. NOLO provides many great books on trademark law, many of which we’ve bought and studied. Reading a few of these will give you a good basic understanding.
4. Do a full trademark search using a trademark attorney or search service including federal, state and local. We use trademarkexpress.com which we recommend.
   If you plan to be around for a few years, file your trademark with the USPTO using a reputable trademark attorney.

I hope you’ve found this useful.

DISCLAIMER: I am not a lawyer (ed: neither am I!) and this article is my personal opinion. It should not be construed as legal advice, in part or in whole, in any way, shape or form.

(Tony’s note: Pretty sobering experience. I’ve never been involved in any lawsuits– knock on wood– but virtually every one that I’ve personally witnessed has been a result of someone taking something personally. It’s not a game. It’s not about egos. It should be about finding the fairest compromise that allows everyone to get back to the business of making money ASAP. Heck, you can expand that truism to just about ANY business negotiation.)

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.

1. 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

2. 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

3. 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

4. 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.

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): 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’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.