Tony Wright dot com

It’s official.

All the cool kids are coming to Seattle (at least temporarily).

First, Mike Arrington relocates to Seattle for the Summer.

Now Pete Cashmore and friends from Mashable are throwing a bit of a party here as their kickoff to their “SummerMash” US Summer Tour.

The event costs $10 (there’ll be food, drinks, and DJ there, so it’ll be well worth it). Hope to see you there!

Christian Anderson (a former colleague at Jobster) had an interesting (and well-researched) post on his blog called “How to Pitch Robert Scoble — HINT: No Direct Tweets“… , which led to a discussion on FriendFeed (with Robert himself weighing in) that was pretty interesting.

I had a contribution bouncing around in my head but held off responding until I read an absolutely fabulous quote from one of my favorite books on marketing:

““No one ever got anywhere by lavishing calls on Oprah. The only time I’ve succeeded in my career with Oprah was [when] Oprah called us.”

— Barry Krause, in Made to Stick

This advice can be generalized to getting PR, blog coverage, angel and VC interest, and more… And can be summed up in one tight little phrase: “Be worth talking about.”

So how do you get to be worth talking about? Redirect every bit of outgoing energy you’re spending on getting noticed to being worthy of notice. Near as I can tell, this isn’t just a matter of building something great… It seems to be some arcane combination of:

1. Building something people want.
2. Find a parade that’s forming and start walking in front of it. We’ve (by pure luck) done well from PR perspective by diving headfirst into the “information overload” meme that seems to have growing interest and press coverage. Whether you’re building a comfortable lifestyle business or shooting for the moon, it’s great thing to be topical. A great contempory example of this is FriendFeed– they’ve (perhaps accidentally) inserted themselves into the Twitter conversation. If Twitter had never existed, would FriendFeed have gotten a tenth of the organic PR?
3. Figure out the best way to deliver your message– find a way to make it sticky (”Made to Stick” espouses being simple, unexpected, concrete, credible, emotional, a story). Entrepreneurs (especially if they are web geeks) notoriously marginalize this step, but there’s all sorts of great stories about simple messaging shifts making a huge difference. I don’t think we’ve nailed the perfect message for RescueTime, but I’m in a fairly constant state of brainstorming and experimentation… I’ll tell our story with a new permutation just about every day to see if I can find something that resonates just a little better (this is one of the many reasons that “stealth” companies are so often ridiculous).
4. For God’s sake, get some freakin’ traction. Bloggers and reporters are in the business of reporting on the metaphorical parades that I just talked about. The best way to prove that you’re at the front of a parade is to have an army of enthusiastic users who are already using assorted channels (word of mouth, blogs, twitter, etc) to tell the world how important you are to THEM. It doesn’t take MUCH traction– two or three vocal users is often enough to convince a blogger than you’re worth a second look.

I’ll finish with a great quote from Seth Godin on “grand openings“:

“The best time to promote something is after it has raving fans, after you’ve discovered that it works, after it has a groundswell of support, [ed: and after you've figured out how to effectively talk about it]. And more important, the best way to promote something is consistently and persistently and for a long time. Save the bunting for Flag Day.”

I just got word that I’ll be speaking at the Information Overload Research Group 2008 Conference in New York City on July 15th (though I’m not on the page yet… ).

This is the grassroots organization mentioned with RescueTime in the New York Times article “Lost in Email, Tech Firms Face Self-Made Monster” (well, it’s probably fairer to say that this is the article where RescueTime was mentioned with them!).

The conference looks like it’s going to be real interesting (and not just because I’ll be speaking there– I’m positively riveting!). If you’re in the neighborhood (or if you need an excuse to visit NYC), you should sign up (the conference only costs $150 and includes lunch– it’s a helluva deal). Brian Fioca, one of my co-founders will also be in attendance.

If you don’t want to go to the conference but want to grab a beer on the 14th, drop me a line!

A lot of people are damn religious about bootrapping businesses. Especially nowadays when it’s so easy to start a software business– you just need a few hackers, Ruby on Rails, a cheap virtual server and you’re ready to roll, right?

Sure.

But just because it’s cheaper to start a software company, doesn’t mean that it’s that much cheaper to make it from when you launch a product to the point where you’re sitting back, drinking a margarita, and marveling at the recurring revenue machine you’ve created.

The way I look at it, there are three bars that matter to me.

1) Making enough money that the business brings in enough money to pay the overhead. Rent, servers, lawyers, whatever. Hopefully you keep this really lean.
2) Making enough money that the founders get an insultingly low (but still existent) salary.
3) Making enough money that the founders can take home roughly what they’d make if they went and got a real job.

Bootstrappers are woefully bad at guessing how long it’ll take to get over these bars.

Let’s look at everyone’s favorite example of bootstrapping: 37signals (whose products and philosophies I love, by the way). According to a recent post, it took them about 6 months to build Basecamp, with DHH spending 10 hours a week (they don’t mention how much time other folks invested, but let’s assume it’s 2 other people at 10 hours a week). It turns out that with a really popular blog, a very successful consulting firm, and all of the attention that they got with Ruby on Rails, it took them about a year to get to the point where they could give up consulting and work on it full-time. I assume that they were somewhere between the 2nd and 3rd bar (mentioned above) before they made the leap, though they might’ve taken a pay cut as a leap of faith in the growth that Basecamp was experiencing. DHH sez:

“It didn’t turn into a smash hit overnight either. We ran Basecamp for a year alongside our other obligations before it was doing well enough to pay all the bills and afford our full-time attention. Most good businesses didn’t become great ones within the 12-18 months that the poster boys of the startup lottery did.”

Amen!

I’ll give you an example closer to home. RescueTime (my baby) was on TechCrunch 3 times, LifeHacker twice, and add in a few thousand other blogs (of varying flavors and colors). We are a Y Combinator company, which gives us plenty of geek cred. We’ve been [edit for clarity] mentioned in an article on the cover of the New York Times, and have gotten mentions in PC World, US News and World Report, BusinessWeek, and more. More important than that, we’ve got happy users who seem to like telling their friends (the old fashioned kind of viral marketing!). I think most SaaS startups would feel very lucky to get this kind of attention– we certainly do. But for all of this attention, I really don’t expect to clear that second bar for many many months (we’re only a month or two into having an offering that people can pay money for, so give us time!).

Let me be clear about the type of startups I’m talking about– I’m talking about low-cost (or free) product companies with price points low enough that having a human being actually SELL the damn software would be inane. Whether it’s a payout of $.83 for an ad click or $24 bucks a month for BaseCamp– having a human being wandering around selling this stuff doesn’t scale, and chances are your founding team doesn’t consist of anyone who is a motivated (and skilled) software/ad salesperson anyways.

On the other hand, if your price point is high (generally requiring a more complex or premium offering) or if you have a services component (web development consulting, managed hosting, etc)– you’re golden… Or at least you have great potential to ramp up revenue fast (as you can justify a sales effort and fairly easily convert time into money). Of course, there are the obvious downsides– for enterprise software you have to build… enterprise software (capital intensive and damn ugly). And then you should expect to spend 60-70% of your cash on sales and marketing. If you go the services-heavy route, you’re simply selling time for money… You can make a nice business out of this (I ran a consultancy for 7 years which I eventually sold out of) but there’s virtually no equity to be built– no one wants to buy a consulting business.

In my opinion, if you aren’t prepared for 18-24 months before you actually get your first paycheck (either through savings, doing it part-time / half-assed, or seed funding) you’re setting yourself up for disappointment.

Just a short note to let folks know that I’ve switched my commenting system over to Disqus.

Disqus is a hosted commenting system (free) that offers a few clear benefits:

• 2 way communication with people who comment. This is the one I care about. Very often, someone leaves an interesting comment on my blog that I want to respond to. I usually do, but it’s unlikely that that commenter will ever know about it… Disqus allows the commenter to be alerted to any replies to their comment, which can continue an interesting conversation.
• Threaded conversation. No-brainer. No longer will I have to say “@PersonName:” to make it clear who I’m responding to.
• Persistent reputation. The biggest problem (IMO) with conversation on the Internet is that the average Joe has trouble being polite– and some people are being impolite and just cruel. I love the idea that Disqus saves everything you say and you can vote up (and down) any comment. If Disqus gets big enough, you could imagine being able to set rules like “no comments from non-registered users who have an average comment vote of less than 1″.
• SEO Benefit. To be fair, Disqus (right now) hurts your SEO on one front. Given that I don’t really care too much about traffic to this blog, I’m okay with that (they are working on an API version that calls the comment content with their API rather than JavaScript)… It’ll be interesting to see if there is an effect on search engine traffic. But it’s not often mentioned that Disqus drops links to your blog (and each post) on your community page (mine is at http://tonywright.disqus.com/ ), which provides some nice positive SEO juice.

Disqus offers quite a few other benefits– the above are the ones I care most about. If you have a blog, check out their tour or just take it for a spin. It’s a breeze to set up!

There are people in the world who make a living communicating and living “in the noise” of email, IM, Twitter, Digg, TechMeme and the like. For them, the parade of communication and and information is probably a boon.

Unfortunately, for the rest of us (who make a living producing stuff– whether it’s software, design, written words, business plans, law briefs, or whatever) communication and social software is a necessary evil that’s getting to be… more evil.

Think about what the knowledge worker looked like 15-20 years ago compared to today. What frightens me is how scientific social software developers are getting about separating people from their time. We’re well beyond cowboy coders building something neat that people latch onto and have some fun with. Instead, we have analytics teams measuring how software is being used in a way that’s really never been done before. Hovering over our LCD cages like BF Skinner, they are watching what we’re doing, tweaking things to make it more engaging and more addictive, and measuring some more.

I liken it to the evolution of casinos and cruise ships, who basically run human cattle through finely tuned funnels designed to fleece them of money at every step… But instead of money, what we’re being fleeced of on the Internet is time and attention.

Again, for some people– this is fine. For some people, it’s literally building a career. In a way, I’m envious of them– they get to spend their lives immersed in a life-long party. I’m kind of envious of people who work in Vegas, too.

But for the quiet army of knowledge workers who are actually creating stuff– the boots on the ground in our knowledge economy– I think the increasingly personalized infoporn delivered to us through a broadening array of channels (like RSS, alerts, Twitter, Digg, Email, IM, Social Networks and more) is a looming disaster.

I imagine some people are shaking their heads reading this stuff and saying, “But people can choose not to indulge in this crap. We’re all perfectly capable of behaving like adults and working when we need to.” Indeed, maybe people will wake up and we’ll see a renaissance of attention.

I’m not so sure.

As I look at industries ranging from the gambling to alcoholic beverages, and as I watch very smart people fall prey to the attention-vultures, I think I’m more and more convinced that a concerted and scientific attack on the pleasure centers of our monkey brains will win the day.

Tomorrow I’m speaking on a panel at the 6 Hour Startup Conference. It should be good fun and (hopefully) informative, so if you’re spinning up a new company (or pondering it), you should come on by. Here are two things I won’t be doing at the conference:

• Pitching my own company
• Reading bullet items from a PowerPoint deck

Here’s a great quote from a great blog post about conferences and meetups:

“Here’s what a speaker owes an audience that travels to engage in person: more than they could get by just reading the transcript.”

I’m not a stellar public speaker (and it’s more challenging to reliably deliver value on an unstructured panel like this), so I hope we can deliver.

I can’t help but think that the startup world is a bit drunk on the concept of viral distribution. Distribution is a huge problem for startups, so I suppose that I can’t blame them.

First of all, I want to point out that I think viral distribution freakin’ rocks. It’s amazing. It’s awe-inspiring. If you can build virality into your app, do it– and do it early. What I’m focusing on in this post is when a startup is presented with a choice of “viral or value”. Either in the very earliest days when deciding what idea/problem/space to pursue (”We really love this idea, but this OTHER idea has soooo much inherent virality!”), or when making choices about features and initiatives in your startup (”THIS would make our users happy, but THIS would really bring in the new eyeballs!”). While we all like to go on about all of the hats we wear as entrepreneurs, it’s damn hard to be maniacal about making your users happy AND be investing time and energy in distribution.

So, as I watch myself continue to back-burner features at RescueTime that have viral/SEO potential, it occurs to me that it’s probably worth running through my thoughts on WHY. Thus this blog post. You can run through my thoughts with me.

“It’s easier to build a great business on top of an existing viral engine than it is to build virality into an existing business”

This was said to me by a hacker who was working with a team on a “stealth viral business”. At the time, I found myself nodding. You can’t throw a rock in Silicon Valley (or Seattle) without hitting a startup that has tried to staple on a viral loop to their application or service. “I know!” Manager X says. “Let’s add a tell-a-friend bucket to our app. And we need to widgetize it. Oh, and we should probably make a funny video about it! Then we’ll explode!” It turns out that viral loops are HARD.

But, as I think about it, I can name something that’s a LOT harder, and that’s building a product that people really want. In fact, I can fairly readily name off a long list of Facebook Apps and widget companies that have, with fairly minimal effort, built apps that are viral. I can’t as easily name off companies that have created great products that people love over a long weekend of coding. Products are HARD. Virality is, comparatively, much easier.

Another point to illustrate this– Top Facebook Apps are hemmoraging active users (some have lost 30-40% from peak). Presumably, these app creators are alarmed. I can imagine small teams huddled over a table frantically running through how they can make their apps more fun, more useful, more real. Here is an army of smart and well-financed people who are trying to add a great product onto an existing viral loop. I don’t think many of them are having a lot of success.

Virality Isn’t New

It’s important to note that virality isn’t new, especially if you argue that word-of-mouth is the same thing. For the purposes of this post, I’m talking about the type of virality that Andrew Chen (who is one of my absolute favorite bloggers) defines as:

“I tend to think of Viral Marketing that include both systematic and unsystematic ways that your current customers acquire new customers… In some of these cases, the virality has been “built-in” to the system - for example, but chain letters explicitly promise you something in return for sending on a letter, as do Multi-Level Marketing systems like Tupperware. These incentives and systematic design are originated with the intent to propagate a viral process.”

In the standard word-of-mouth model, you have:

1. User tries product.
2. User loves product.
3. User evangelizes product to everyone they know.
4. Some subset of those preached to (greater than 1) tries the product.
5. Rinse, repeat.

Think Google, Apple, Microsoft (in the early days), etc.

In the viral-focused model you have:

1. User tries the product.
2. As part of trying the product, they (sometimes unwittingly) tell everyone they know about the product.
3. Some subset of those victims tries the product.
4. Rinse, repeat.

Think Facebook Apps, chain letters, tupperware parties, Geocities, and Hotmail. Or, let’s roll back to another web investment mini-craze– the SEO/Vertical Search business. Any SEO/user-generated content business is inherently viral. User creates account. Some subset of new users create a page of content. Content gets indexed by search engines. The new page brings in some traffic. Eventually, that user-created page converts a visitors to a content creator. Rinse, repeat.

Paul Graham (”ah, yes– the obligatory PG quote”) talks about the concept of getting upwind of revenue:

“In Patrick O’Brian’s novels, his captains always try to get upwind of their opponents. If you’re upwind, you decide when and if to engage the other ship. Craigslist is effectively upwind of enormous revenues. They’d face some challenges if they wanted to make more, but not the sort you face when you’re tacking upwind, trying to force a crappy product on ambivalent users by spending ten times as much on sales as on development.”

What I THINK he’s also advocating for is the concept of getting “upwind of distribution”.

It seems to me that when you remove the “user loves the product” step, you’re failing to solve the CORE problem that needs to be solved to build a great company. If you can’t create and maintain unique value with your widget or Facebook app, you’re doomed to experience the same fate as chain letters, mood rings, and GeoCities. You might well be able to get in and get out (with millions of dollars in your pocket) before you “jump the shark“. If your startup has a user-generated-content component, you might be able to amass enough SEO-fodder to make a healthy living on advertising, but that has its own challenges.

Hopefully you’ve got some grand capital-efficient plans to get it in front of your target market (WE do– we haven’t even gotten started at this front). But if your wondering why users aren’t coming to your web site, chances are you have a product problem– not a marketing problem.

Long ago, when I set up this blog I read a few primers on blogging. One of them suggested that you have a picture of yourself on your blog. There were lots of good arguments for doing it, so I dutifully hunted among my photos for a picture of myself. Turns out that I didn’t have too many (I tend to be behind the camera rather than in front of it).

I did find one that I liked. It was on a nasty old fishing boat on the Prince William Sound (in Alaska). A friend of mine had bought the boat and invited a few friends for an multi-day cruise. There was no running water. The bathroom was a 5 gallon green bucket (I’ll leave it to your imagination how we “flushed” it). At the end of the trip, I was scruffy as hell, but I’d had an absolute blast tromping around the rugged islands of Alaska. That’s where the pipe picture was taken.

As my blog actually accumulated readers, there came a trickle of negative feedback about the pipe, which has increased to a steady stream. Some people feel like I was trying to look serious. Or academic. Or rich. Or that I was just clowning around. To me, the photo had a ton of meaning. To anyone else, not so much.

For some reason, this made me think of one of my favorite posts on product/UX design. Here’s a quote:

“When I started working on Wufoo, I was definitely a bad designer. I thought I was hot shit and knew all the answers. I saw the user as a wild beast that needed to be tamed. He got in MY way. Use the tool the way I designed it, fool—not the way you think it should work [emphasis added]. Thinking back, I remember being angry all of the time.”

One of the big lessons (which I continue to learn a little bit more every single day) is that it doesn’t matter a damn bit what you’re saying (whether you’re “saying” it to a user with design or saying it with words or pictures on a blog), it matters what’s being heard.

So I’ve pulled the pipe picture in favor of a more recent one. Some people suggested that I keep it as a “schtick”, but I’d rather be known as “that guy who kicks ass with RescueTime” than “that guy with the pipe” (who actually never smokes a pipe).

One of the frustrating things about iterative software development is that you never get to do a heroic launch (a la Steve Jobs). Your software starts off to be barely good enough for someone to endure. The next week it’s better. Rinse, repeat. If you’re good, someday you wake up and you’ve built great software. We’ve got a long road before this day, but we think we’re onto something.

Anyhoo, hat tip to Web Worker Daily!

They posted a note describing some of the cool new features in RescueTime, including the very first version of RescueTime Groups, which seems damn promising. Give it a look!