Posts Tagged ‘lessons learned’

What entrepreneurs can learn from Christopher Columbus

October 11th, 2010

I think Christopher Columbus day is really a celebration of discovery. I also believe that the goal of entrepreneurs is to discover a repeatable business. So, what can entrepreneurs learn from Christopher Columbus?

1. The most transformational ideas are crazy. I mean, reach the far east by going *west*?
2. The funding for most grand discoveries often comes from angels, who do so for commercial reasons principally
3. You will probably discover something different than what you originally set out to find (and it may take awhile before you figure out what it is that you’ve discovered!)
4. Even when you find something amazing, you won’t necessarily end up rich

Draw your own conclusions!

1. technology, 3. et cetera , , ,

DYI: How to get unlimited calling for $2.95 a month

September 4th, 2009

I’ve recently moved, and as “the person in charge of administering the network,” I undertook a project to re-vamp my phone service. Why? Here are my requirements:

1. The call quality must be terrific
2. I must be able to use a cordless phone for calls at home
3. I must be able to make and receive calls using a normal phone number
4. I want to be able to receive calls on my computer when I’m on the road
5. I want to make it easy for people to contact me even though we have poor cell coverage at our house
6. I want to pay as little as possible

Pretty formidable list! To make this happen, you have to understand that the main problem is getting a phone number linked to an SIP. In a way, phone numbers are kinda like buying URLs. Then you have to pick at VOIP provider, I found this great resource, which helped steer me to callcentric. In totality, here’s my solution:

1. Get a Google Voice account (sadly, invitation only–but free if you can get one!)
2. Get a CallCentric “dirt-cheap phone number” (and avoid the 911 fee) — only $2.95 per month
3. Buy a VOIP box (here’s mine: 1-time $70 charge or less if you search around)

That’s it. OK, there are a few drawbacks that might annoy some people. With the current set up, I have to use my Google Voice’s web interface to launch outbound calls (i.e., I can’t directly dial from the handset.) You have to have a Google Voice account, which is a show-stopper for most people. Also, the set up of the VOIP box is unnecessarily complex but at least well documented. Mitigating this problem, we have another more normal Vonage line that has regular dialing.

But on the plus side, people can call my Google Voice number and get me whether I am at home or out and about on my cell! Through google voice, I get free SMS’s and my voicemails are transcribed into emails for free. And the call quality is indeed terrific. My landline is a fashionable Palo Alto (650) number. Best of all, I now have unlimited calling for $2.95 a month!!!

1. technology , , , , , ,

“Don’t stop believing”

February 26th, 2009

Jason Calacanis has some great thoughts about what to do when you think your startup is about to fail. I’ve gone through this experience once as a founder of, and I’ve seen it at a couple of companies that my friends have been involved in. This advice is bang on. Let me summarize, and you can read his long but highly readable original missive here.

1. Test your funders. Tell them you believe, and that you are going to stretch things out but you want them to put in more now (even though you still have a ramp).

2. Test your employees. Make the cuts. Consider salary reductions, but make sure that the employees who remain are still happy.

3. Test your landlord and vendors. Negotiate for a little free rent, subletting permission and other discounts. Losing you completely is not in their interest.

4. Put yourself to the test. Offer to sell your car to put the money into the company! Take the same reductions as the staff.

5. Put your product to the test. Make sales calls yourself. Celebrate the process of sales: new leads, pitches, etc.

6. Know when to quit. Use your last 120 days of burn to wind down honorably.

Great stuff–thanks Jason [x2].

(And if you are as obsessed with failure as I am, check out my other post “Why failure isn’t the worst outcome.“)

1. technology, 3. et cetera , , , ,

Seven lessons from YouTube

August 8th, 2008

Jawed Karim, a co-founder of YouTube and current Stanford student, gave an excellent talk about the lessons of youtube. (The talk is from 2006, but I just watched it today for the first time.) If you have ADD, skip to a little past 40 minutes and you can catch some video of despair after they launched but before youtube caught fire.

My takeaways:

1. Make something complex but useful into something easy
2. Mix enabling technologies and great user interface design to be successful
3. Marketing is hard, so lots of things fail before they succeed
– email to friends didn’t work
– craigslist postings didn’t work
– giving an ipod nano everyday helped a little bit at the start
4. In my opinion, embeding videos into other people sites was the key to youtube’s success. Then, video producers finally had a real incentive to host their videos at youtube
5. Virality is driven by a very low percentage of superhits
6. Hence, scale is important for continuous growth
7. I disagree with Jawed that the community features on youtube were/are critical to its success. Rather, they leverage myspace’s community features to get the word out

Anyway, check it out for yourself.

1. technology ,

Why cable companies limit upstream bandwidth

August 8th, 2008

series of tubesI have always cursed Comcast for limiting my upstream bandwidth. It takes so long to to upload pictures to smugmug, VoIP can get garbled, etc. So, today I have AT&T installing u-verse into my house so that I increase my upstream bandwidth by a factor of 20x or more. Yeah!

But for even longer than I have cursed Comcast, I have always wondered: why do they limit the upstream traffic? Well, now I am now enlightened. In short: Channel 2.

1. technology

Why failure isn’t the worst outcome

July 23rd, 2008

homerHere’s a pretty insightful post-mortem from a failed startup. Key lessons learned (stated in the positive): start small and get feedback; have a good partner; pick a good market. To me, the most interesting thing about this story is how it highlights how failure isn’t the worst outcome. He concludes:

“It’s not really the end of my startup journey – I suspect there will be other startups in my future, both as an employee and hopefully as a founder. But it’s the end of this startup. I’m a little sad about that, but I have no regrets about having started it.”

He is spot on. At a minimum, a true failure like this gives the founder an important experience to draw on in the future, especially when you can be as honest and thoughtful about the failure as this entrepreneur is.

So what’s the worst outcome? Mediocrity. If you languish around making tiny steps forward, and a few backward, you can more easily delude yourself to chase the mirage that’s just around the next corner. This entrepreneur, although his current venture has failed, can live to fight another day on a better battleground.

Congrats to Jonathan Tang for avoiding mediocrity and may his next venture be the best outcome, success!

Uncategorized ,

Crowdsourcing web design

May 27th, 2008



On weekends and evenings, I am helping to launch a start up social networking site called It’s an interesting idea, I think, but a topic for another day. Today, I want to talk about our experience using is a marketplace for web design. You post a proposal for the job you want, and freelancers from around the globe respond by designing things for you. It could be brochure, a web page, a logo–whatever.

In our case, it was a logo. For a $200 prize (and $70 more in listing fees), we got ~170 designs for our logo! You get to give feedack, so many of these designs were iterations in the direction that we wanted. It was tough picking a winner because many of them were terrific. See the winner above, and a couple of runner ups below:

Runner ups

runner up1

runner up2

Of course, there were some disasterously bad ones too. Here’s a favorite lemon:
yasnap gone wrong

Next up, web page design. Armed with this great logo we are seeing if we can crowd source 2-3 key pages of our service. Wanna compete for our $500 in prizes?

1. technology ,

On Texas and Ohio

March 6th, 2008

As an Obama supporter, I was disappointed that Barack did not seal the deal yesterday. I have been reflecting on the delegate stalemate and the PR loss, and I have a few thoughts.

1) Identity politics: Obama has made massive progress in demonstrating that equality for all is a powerful message for whites and blacks. I am surprised that he wasn’t able to carry that message to the Hispanic communities in Texas. I dislike Clinton’s direct approach at appealing to women, and I don’t think it is working well with younger women. I much prefer Obama’s President for all Americans message and policies.

2) Generational warfare: Clinton is for old people and Obama is for young people. The candidates appeals are *not* personality-based but policy-based . Clinton wants to mandate that young people pay more money into health care in order to pay for more benefits for older people. Obama wants to lower health care costs–which may very well end up in less health care services for old people. Again, I think Obama has to devise a message of equality for all and policies that support it. But the worst is this aweful “experience” debate. It’s really just a thinly veiled ageist argument that anyone born after the baby boom can’t be President. Hasn’t 8 years of Bush/Cheney proven that ‘adult’ supervision isn’t all that it’s cracked up to be?

3) Tired solutions vs Fresh Solutions: Hillary I think has a slight advantage framing the election as solutions vs. rhetoric. For awhile, I favor a direct defensive maneuver by Obama: publishing policy papers, holding smaller events, etc. But now I think that is wrong. Obama has plans that are just as detailed as Clinton. It is really a battle of “tired solutions” versus “fresh solutions.” I mean she is just re-treading past political battles, whereas Obama wants to move us forward.

Well, that’s it for now. If you want more great Obama commentary, check out Marc Andreseen’s excellent endorsement of Barack Obama.

2. politics , , , ,

How to hire a good technologist

January 11th, 2008

I was just thinking about this issue as I read this post about how to get hired by Google. Then, along comes this terrific list of criteria is about screening for good tech hires. Hint: what you want is not printed on the resume. I am sad that the cat is out of the bag.

I’ll only mention one caveat: it is hard to test people against these criteria unless you are yourself high in them yourself.

1. technology

Sold Out! 10 million in 10 weeks

December 12th, 2007

Look ma! Someone decided to post a video of my presentation last night on a prominent facebook blog.

My Stanford class on facebook apps is wrapping up. As a class of 80 students, we created 40 or so applications that run within facebook’s social network. As of last night, more than 16 million people had installed these applications.

Anyway, our class presented the results last night at Bay Chi to 400 people, including a hundred people who watched on video screens in an overflow room and dozens of others who were turned away at the door. Tonight, we’ll repeat the exercise tonight to an even bigger audience at the Stanford Alumni center.

How were these applications able to be so successful? Below is a transcript of my three minute speech or you can watch this 1 min 52 sec screencast that is almost identical in content or grab the slides or handout. This framework was created by Xingxin Liu, BJ Fogg and me.


Six patterns for success. We conducted a bottoms-up analysis of the top 100 facebook apps according to Appsaholic. We found six patterns and then classified them. Native patterns are tightly integrated in the profile pages and rely heavily on friend selector and other functionality exposed by facebook, whereas adapted patterns do not.

Within native patterns, you can take actions or create artifacts that are either individually- or group-directed. For example in 1A, provoke and retaliate apps allow a user to perform an action on a friend. This genre includes apps like KissMe, Hugs, Zombies and X Me. In 2B by contrast, group exchange apps allows users to create and share artifacts collectively. This genre includes the top 2 apps, SuperWall and FunWall and others like BumperSticker.

Within adapted patterns, ‘competition’ adapts popular games like Scrabble, poker and video games to a social context. Adapted patterns, however, are cross-cutting: many native apps include Leaderboards and status levels to foster competition. Meanwhile, many apps include ‘deceptive’ like misleading fake facebook buttons and other navigation to trick users into install other apps.

Here is Bless You, a class app that reached 200k users in 20 days. It is quite simple: send friend a bless by one click.

Bless You - 1

Bless You fits the ‘Provoke& Retaliate’ Pattern. However, it includes other patterns too: a level system for competing, top lists for comparing, profile box for self-expression and group exchange; and ‘deceptive’ navigation.
Bless You - 2

We coded every app by primary pattern in the top 100 and aggregated the data in this chart. Deception is common but secondary, so we have omitted it. Some observations:
1. A small number of Group exchange apps reach many users and are highly engaging
2.Reveal & Compare appears to be faddish – large reach but low engagement
3. Compete is highly engaging within a niche
Facebook Stats

Which applications from tonight’s presentation fit into which patterns? Hopefully, these patterns offer one useful way to think about why these apps were so successful. Questions? We’re Michael Weiksner, Xingxin Liu and BJ Fogg. Please see us at intermission, and I have about 100 copies of our handout if your interested. Thank you.

1. technology , , , ,

Can iTunes earn more by charging less?

October 10th, 2007

I claim that iTunes could earn 40% more revenue than it currently does just by slashing its price from $1.00 to $.50 . Why? Let me explain.

Digital music is a virtual good. As v1.0 approximation, I assume:

  • Marginal costs are essentially zero (e.g., hosting, processsing and bandwidth)
  • Customers have limits on the quantities that they’d consume even if the good were costless
  • Prices are somewhat inelastic because customers are price sensitive
  • Each customer’s demand curve can be modeled with the classic Cobb-Douglas demand curve

The cost side of the equation is simple: zero marginal cost. These things are just digits, so hosting, processing and bandwidth costs are negligible. Sure, apple has to pay licensing fees for the music. But for the sake of argument, let say that these fees are revenue sharing agreements so apple’s profits are still proportional to total revenue.

The action is on the revenue-side. We can take a classic demand function, d=u^1(1/a)xp^(1-1/a), where d is demand, u is utility, p is price and a is a measure of price elasticity. The suppliers problem is to maximize profit, d*p.

Cobb-Douglas Demand Curve

It turns out for products with relatively elastic price sensitivity, you want to set p as low as possible. So, the itunes store should pick a low price for music because the lost revenue per track is more than made up by demand for more tracks. (Teenagers are extremely price sensitive!)

Conversely, for products with relatively inelastic prices, you want to set p as high as possible. I am not aware of any virtual products with this characteristic, but the math works out that you more than make up for the lost demand in the price increase. Perhaps some unique goods in Second Life fit this category, although there is a cost at least for players in terms of time to create some of the valuable objects.

How low should itunes set its price? In the ideal case, the price tends towards zero. But in practice, consumers have limits. How many songs would you download per week if itunes were free? 7? 14? 100? It wouldn’t really go towards infinity!

You must have a good estimate of the price elasticity, the utility and the maximum quantity demanded to solve the pricing problem. In particular, you pick the maximum price such that the consumer still demands his maximum amount.

For example, let us assume that digital music has an inelasticity coefficient a=0.4 and that a teenager would download a maximum of 20 tracks a week and has a u=2.2 (which implies that she currently downloads 7 tracks a week at $1 each on itunes). Note: all of these numbers are just my best guesses. The ideal price would then be $0.51, which would generate $10.10 in profits per week per customer rather than $7. That’s a 44% increase, and the kids would get nearly triple the tracks per week!
itunes case study
Of course, itunes has other considerations. They do have to share the profits per track, and I think that ituntes may have negotiated a flat rate rather than a percent of revenue. (A flat fee deal structure leads to deadweight loss, where the labels, Apple and consumers all lose.) In addition, they claim to have other considerations like “simplicity” in pricing and the labels are certainly wary of undermining their CD sales.

Finally, there are other constraints that I haven’t considered in this simple analysis. Teenagers have budgets, so perhaps $7 a week is the maximum that they can spend. (I doubt this.) Also, I totally guessed at 0.4 for the price elasticity. But actual itunes data bounds the possibilities. We know that itunes actually makes $7 in revenue, so values greater than .45 are implausible. We also know that consumers only buy 7 songs a week at $1, so values under .3 are also implausible.

This range, 0.3 to 0.45, is great to know if you are launching your own virtual good. Without additional data, you should use something in that range as your initial value. Similarly, you can also use u=2.2 as a starting point for knowing your utility. How attractive does your virtual good seem in comparison to digital music? Ratchet that number up or down a little. And as data comes in, you can tweak the parameters and figure out the best price.

lessons learned (v1.0)

This is a simple but useful model. Some possibly important complications: How much should you raise prices to signal higher quality? What if you have a means of discriminating per customer, e.g., should you charge different prices for heavy and light users? What you can discriminate by product, e.g., should you charge different prices for popular and unpopular products? I will examine some of these more advanced questions in the future because I suspect that iTunes (and other providers of virtual goods) could have an even greater increase in its profits by intelligently using dynamic pricing.

1. technology ,

Finding a new windmill to tilt at…

September 25th, 2007

Scott Reents sent me an email with just a single link, and man did it bum me out.

Lawrence Lessig is a famous constitutional law scholar who teaches now at Stanford Law School. For the last ten years, he has led the charge to redefine copyright in the Internet age as the founder of Creative Commons. Recently, all of us suffered a major setback when he lost a (literally) ‘Mickey Mouse’ Supreme Court case. And now this cause is losing its principal advocate, who has found a new windmill to tilt at: corruption. (He says: “I am 99.9% confident that the problem I turn to will continue exist when this 10 year term is over. But the certainty of failure is sometimes a reason to try.“)

For someone who is so admired and successful, I found Lessig’s inspirations really depressing for this decision in his announcement (“Required Reading“). His three inspirations are (1) obama; (2) gore and (3) an unnamed prominent republican who called him a “shill” for google.

Working backwards: first, please don’t accept the “shill” charge, Professor Lessig! Or tell me: how did you get duped into being an accomplice in corrupting the system? These charges really got to hurt an advocate who devoted a decade to an issue. I think that he should rather reconcile his views on the particular issue in question — network neutrality — where he should explain where his principled position does indeed differ from google’s largely correct but somewhat self-interested position.

Second, Al Gore is valiantly pursuing the global warming issue. But he is a sad hero: don’t you think he’d much rather have been President? And as a serious Washington insider for decades, it seems a little late and convenient to start blame the system now. It’s especially disingenuous because the environment also has its own interest groups that pray on emotional responses.

Third, he says that Obama is running for Presidency because of a ten-year “up or out” strategy. It’s a terrible parallel because Obama is riding at the top of his wave and Lessig is adrift after recent serious setbacks. So, claiming success (“we are going to prevail in these debates. Maybe not today, but soon.“) is decidedly weak. In fact, the weakness of this argument by such an admired thinker leads to question whether my own support of Obama is foolish too!

That said, Lessig is an *amazing* person so I wish him all the luck in the world in this new endeavor as well as those who will remain in the copyright arena. Lessig, here’s a message for you in the unlikely event you read this post: please understand that it is written with the same honest candor that your post was written and that I have the utmost respect for everything that you’ve accomplished. Corruption is a terrific new windmall to tilt at….good luck!

Uncategorized , , ,

Obama donor match

September 19th, 2007

Obama continues to think of innovative ways to fundraise on the Internet. Today, the campaign announced a program for matching donations. They will match me with another donor from across the country who agrees to donate the same amount. It sounds really cool. They are promoting it like NPR: donor matching means that you are doubling your contribution. I am not a fan of that appeal because it doesn’t ring true to me. What I do like is that they are fostering horizontal connections, e.g., among supporters, rather than just the vertical connection between the campaign and each individual donor.

I just gave $25, and here is what happened. I was immediately matched by ‘gerald v’ from woodbridge, ct. I sent him a personal note, asking him if he wanted to compare notes about the election and I opted to share my email address with him. The campaign immediately asked me if I wanted to pledge to match someone else.

I’ll keep you updated if Gerald responds!

2. politics , ,

Travel Mashup

September 17th, 2007

What is a mashup? Consider the trip to Greece that my wife Maria and I put together this past summer. We stayed in 4 different cities, took 5 flights on 4 different airlines, rented cars in multiple cities and took a ferry. We planned everything ourselves with web research, online booking and emails. We had transportation, maps, restaurant bookings, sightseeing and activities information. Lots of related information (e.g., stuff in the same city) and lots of similarities in each piece of information (e.g., confirmation codes, names, times, phone numbers), but nothing completely standardized. So, the spreadsheet organized by dates across the top and function (e.g., transportation, hotel, etc.) down the side. It worked, and we pulled it off! (Although Maria might argue that driving in Santorini was a BIG mistake.)

Well, the travel mashup site called TripIt are entering the fray to make this kind of planning activity much easier. After registering, you just forward all your confirmation emails to and they automatically compile your itinerary for you. You can see an example of my upcoming trip to Brussels here. It adds local weather, maps and directions for you. 60 degrees and a good chance of rain – ugh!

The home page of

(I plan to write several more posts about various mashup sites, and hopefully a more analytical piece that gives some insight into what’s going on here. But for your sake, gentle reader, and mine, I think I’ll start off with a few of these more descriptive posts first.)

My experience was reasonably good. The airline confirmation emails worked fine. I didn’t have an email confirmation from my hotel, and I don’t think that they can automatically process most hotels anyway, so I had to add that information myself. I got some weird mapping results. First, it gave me driving directions from London to Belgium. One click and I deleted that bit of extraneous information, although I wouldn’t have guessed its only four hours to drive! Second, it gave me driving directions fom some airport in France that shares the code ‘BRU’ with brussels. It was a bit of hassle to figure out an alternative airport code that would trick google maps into giving me the directions I really wanted. (Thank you, wikipedia for the answer.) It was also clunky to add the new directions to the itinerary.

There are features that I didn’t use for this trip, but might come in handy. For example, they promote the idea of including web clips. That might have come in handy for my greece trip, if I wanted to add things like ferry schedules, sight seeing info, etc. They also automatically link to SeatGuru that has recommendations about plane seats that could be useful if I had an choice of seat to begin with. (The flights I’m on are oversold.)

In the end though, I think that Expedia doesn’t have too much to worry about. I love the way they keep track of your frequent flier miles and itineraries. And they don’t have to resort to processing emails or “screenscraping” web sites to gather the right information. Perhaps the $5 surcharge isn’t so bad after all.

Next, TripIt has to integrate with TripAdvisor and other sites that have comments by travelers. Perhaps someone would have warned us not to rent the car in Santorini! Now, that would have been helpful.

(By the way, the picture of the sunset at the top of is from our hotel in Santorini.)

1. technology ,

Olark Livehelp