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Shop talk on "intricately managed miracles" and early-stage subculture edited by four professionals in the throes of growing and funding early-to-mid stage tech companies.  For bios and other goodness click here.

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The Five & Dime
Thursday
Oct072010

Average Number of Characters in a Twitter Handle

Quick midday post to further explain a Tweet from earlier today re: average length of Twitter handles:

We have written a number of 'auto-Tweets' at Hashable in the past few months - Tweets that get automatically sent from our system/bot Twitter account whenever a user takes a certain action.

For example, when you send your friend a #invite, our system sends a Tweet to your friend with instructions on how to log in. Or when you make a #intro, we auto-Tweet you and your friends with a link to the 'ice-breaker' page getting your friends started with the intro.

One petty but key input to writing these auto-tweets is how many characters to assume for the Twitter handles that need to be included in the Tweet.

As an example, here's a blank draft for an Invite auto-tweet:

When we were writing this Tweet we generically plugged in "@handle1" - an 8 character handle. And we had 16 characters remaining. The max handle length is 15 so our message could have actually been a little longer.

But in some cases we need to include multiple handles - up to three let's say - and have never quite known how many characters to assume for handle length in order to understand how many characters we had to work with for the message itself.

Today we finally ran a quick analysis to determine an average handle length. Based on a list of 500+ handles, both the average and median handle length is 10 characters including the @. The majority of the handles that exceeded 10 were in the 12-13 character range - with relatively few in the 14-15 range.

So by way of a rule of thumb - and this is clearly not very rigorous analysis but in absense of anything else - I would say:

1. Assume 10 characters per handle (i.e. use @handle123 as your plug)

2. Make sure you have at least 10 characters unused.

3. If your Tweets need to include more than three handles leave at least 3 unused characters per additional handle.

If anyone has a more rigorous methodology, bring it on! Also, sure there are some glaring flaws here so pls point those out too. Happy Tweeting!

Friday
Oct012010

Community Lessons from the Harvest

  Community has become the foundation of many businesses, particularly online.

As with many parts of what we do online, we are borrowing concepts that have been around for many years, in distinctly non-technical formats.

This week I am in a small rural town in northern Portugal. It is harvest time and the grapes need to be hand picked from the vines and to a wine making facility (or to sale) as quickly as possible. While each grape grower has his own plot of land, this is just one instance where the town pools its resources, gathering a team to go to each plot of land picking each others grapes.

Community is just part of living here, whether you like it or not. Proximity, of course, helps, but there are many aspects of this community that are alive and well in many online communities, or should be. Here are a few:

Everyone can contribute – People of most ages and skill levels can contribute in a community. It gives more skilled people an opportunity to teach and those less skilled in a specific area an opportunity to learn. If the interest level is there, contributions are usually welcome.

Efficiency – Teaming up to achieve a goal is simply more efficient. In the case of grape picking you will have people picking, a person or two gathering the picked grapes and putting them in baskets or bags for market, someone to put them in the truck and weigh them and someone to drive the grapes to market. In other communities, access to information or enlisting a group to help organize an event or other ways to drive efficiency.

Propensity to Give – As part of a community, giving or participating is just second nature. Most community members understand that the more you give (time, expertise, support) and do it regularly the more you receive. While passive members derive benefits, it is usually the members who contribute the most that reap the most benefits.

Social – It is more fun when working toward a common goal when you are working together with others. For the harvest, it’s a busy time for everyone, so it’s a chance to catch up on what is going on in each other lives, pass along news or just spend time together.

Self-regulating – If someone breaks the rules (e.g., in the grape picking case, didn’t show up), whether explicit or implicit, the greater group will in some way make sure it does not happen again, usually in the form of public shame. The ever present threat of this ensures it doesn’t happen often.

Build Reputation – Communities are a great place to exhibit particular skills or expertise, building a reputation.

Celebrate success – After a long day working in the fields, organizing a craft fair or achieving a particular goal – taking the time to share the glory of a success is part of fostering deep communal bonds. Making this a priority and finding ways to encourage this is very important, particularly while building communities.

If you are creating or maintaining an online community, some of the most powerful communities are those that could be formed offline, but have more depth when created online. At Etsy we saw this on the greater site, where expert sellers share tips and help each other with issues and questions. It is not uncommon for sellers to join forces in their local communities after meeting on the site or joining one of the Etsy Teams. These hybrid communities that exist both online and locally are recreating the sewing and knitting circles of the past.

I am having difficulty uploading the pictures to go with this post and will upload them when I get a better connection - but you can see them on flickr.

 

Note: I want to thank Maria at the Biblioteca Municipal de Chaves for letting me have a few extra minutes to finish up this post. Obrigadihna.

Wednesday
Sep222010

How We're Thinking About Our Beta at Hashable

Several people have asked in the last few weeks about how we’re pacing our beta at Hashable – and specifically, what milestones are we using to decide when to bring more people in. This is a fun topic that deserves lots of discussion. Here are some quick thoughts.

First, all beta’s are different – but probably the same general thinking drives the pacing:

1.       Have we gained a strong understanding of who our target adopters are?

2.       Do we understand exactly what those users care about and why they’ll adopt?

3.       Does our product powerfully deliver to the promises of those value props?

4.       Sum of the above: If we drove more people to the site right now, would they convert?

5.       Does it intuitively feel like a good time to increase user volume? (i.e. riding the diminishing-returns curve of exclusivity)

The general idea of the beta is to collaborate with your target users to identify and perfect your killer use case – and ultimately, to achieve Product/Market Fit (PMF). Awesome PMF is what brings user conversion, engagement & virality.

So a simple answer here is that you bring more users in as your confidence in your product grows.

Here’s an internal graphic mapping out the Product/Market Fit process (sanitized of user target numbers and a few other details but happy to discuss some of that in person):

 



It took us ~ 21 weeks to get from our initial concept to the point where we felt confident enough in our live product to start inviting a heavier volume of users into the system. But that alpha period can last significantly longer – Aardvark is a great example of extended alpha to nail PMF (this video is sick, amazing, awesome!).

Here are some quick notes from our concepting/alpha stage that might be useful:

1.       The concepting phase lasted about 4 weeks and involved no development or prototyping outside of basic wireframes. We were debating on all fronts: likely early adopters, value props, allowable friction, minimum viable product, narrow entry points, lean start-up principles, adoption strategies, game mechanics, what are we gonna call the thing …

2.       One caveat we stuck to in all debates was that nobody knows the right answer except the users. Your concepting and alpha stages are all about making brave dumb guesses. (see again that Aardvark video)

3.       I’m not a fan of being in stealth mode during concepting. Our conversations were always active externally too – even some very casual conversations during the concepting stage greatly improve our decision making. 

4.       Our first dev cycle was 4-6 weeks. We were determined not to stay behind the curtain, developing without user collaboration, for too long. We initially invited maybe 30 people in to try it out. We pushed out releases at least weekly from there and invited a new set of people in each week for fresh perspectives. This continued for at least a month. (we still rev weekly btw)

5.       Much of the alpha stage involved further narrowing of the idea and product. The more focused we got, the more excited people got about the product.

6.       Once we saw people reacting positively to our revs, we pressed on the gas a little with invites and in-person demo’s. Again, this ended up being about 21 weeks into our process.

7.       Our next (first?) big awareness push will be timed according to a couple more key product milestones we want to hit before investing in major outreach.

8.       I think learning and reacting are the major characteristics of alpha and early beta – but as you progress along the beta curve towards product confidence your big-block learning turns more into optimizing and tweaking.

9.   But also keep in mind that establishing Product/Market Fit is an ongoing process – once you nail it for your early adopters, you’ll likely need to refigure things as you want to branch out to new target communities.

None of this is rocket science, and we're so early on - it's premature to offer any major conclusions or advice. But I think it’s helpful to benchmark with each other on this stuff as it's kind of a dark art. I’d *love* to hear other peoples’ experiences – and also happy to discuss more in person with anyone if that’s helpful.

And lastly – a huge, major, mammoth shout out to the NYC tech community. Much more on this topic to come!

Thursday
Sep092010

Measuring churn for recurring revenue businesses

For any recurring revenue company, churn is almost always one of the key metrics the company (and their board) tracks. Why work hard to get new customers if you can’t keep the ones you’ve got? Moreover, low churn means you have a strong recurring revenue base and therefore more money to spend acquiring new customers. Thus, having low churn creates a virtuous cycle for the company in more ways than one.

While churn may seem like a straight forward concept, I’ve found that recurring revenue companies often only measure monthly or annual churn in terms of customer count. While this is certainly an important metric, I’m not a fan of measuring churn just on a customer basis for the simple reason that not all customers are created equal. To take an extreme example, imagine an early stage company doing $200k in Monthly Recurring Revenue (MRR) with 200 customers ($1k MRR ASP). If the company had one flagship customer that was actually generating $5k in MRR and that customer churned, that does a lot more damage to the company than the .5% monthly customer churn would indicate. 

Analyzing churn on a MRR basis lets you see other gradients as well. Notably, the recurring revenue base you have from one customer might grow or shrink over time, even if the customer never churns. If on average you lose more MRR on a monthly basis due to your existing customers downgrading their contract than you gain from your existing customer base upgrading their contract, your business would be bleeding recurring revenue and your customer churn number would be silent on the subject. It's difficult to fix what you don't track.

Measuring MRR churn can have some surprising insights too. What we’ve found is that while companies might target 10% customer number churn, those companies might have negative churn on a MRR basis. This means that on average, the company's organic growth (growth in MRR from their existing customers) is above and beyond what they lose from customers churning or downgrading. For those companies, it’s worthwhile to try to look at which customers are churning early in their contracts and which customers are expanding their recurring revenue base; you may notice some patterns. For example, there might be some marketing activities that are picking up more of the former which you can eschew in favor of those that attract more of the latter.

Friday
Aug272010

The Curbed Chronicles: Taking the Plunge

The Curbed Chronicles are my attempt to share a few lessons learned from the early days of Curbed.com.  To set the stage, I wrote a rather lengthy, navel-gazing first post in this series about The Road Trip that Started it All, with the obvious but crucial observation: start a company with people you trust & admire.

Veteran investor, David Hornik lists Team as his first seven criteria for evaluating startups per this recent Q&A Session on Sprouter – a highly valuabe read.

Below I offer up a few more observations from those early days:

2. Take a chance for the experience alone.

When Lock and I first mused about Curbed, we didn’t say hey let’s create an $XB company.  We talked about working on a fun, intellectual project that turned into an aggressive hobby that turned into a profitable company. 

That’s not to say we didn’t see value in the content proposition from day one - in fact, we did! - but we didn’t start at the macro level of sitting around a table with a financial goal in mind  trying to come up with ideas that would somehow net us millions and then argue about who got what % of nothing. 

We started with the idea - Lock’s idea – and then threw in 9-10 months of sweat equity (alongside our day jobs) and a little of our own cash behind it before incorporating.  We didn’t even have that equity ownership conversation until several months after product launch. #trust

Proof of concept for us came down to the question - would people read our site? When it was clear they would, that they would tell their friends, and that they would keep coming back, we took the next step, incorporated and started generating revenue. 

3. Build a product/service that you would use.

Another obvious but overlooked tenet.  I hear friends eager to start companies take a macro approached to assessing current market and demographic trends in hopes of coming up with The Idea that will net them millions.  I recognize that a rising tide lifts all boats, and that when the market is going in your direction it allows you room to make mistakes along the way, etc., but I'm a big believer in building a product/service that you would use first and foremost.

As the primary Customer, you’ll be best positioned to understand the gaps in current offerings and sell the value proposition. Plus you’ll remain passionate about the idea far longer than creating a product for a marketplace with pain points that don’t concern you.  For example, I couldn’t have been part of the founding team for Jalopnik – for many reasons – but for, one: I just don’t care that much about cars.

4. Back yourself first.

With Curbed, we were fortunate in that, once up and running, brands approached us and asked if they could advertise before we had ever created a media kit or lobbed an outgoing phone call.  It was a lot easier to sell ads once we had developed a site (product), which we felt filled a gap in the market, and could show that our readership base (customers) agreed.

Advertisers were willing to take a chance on us because we took a chance on ourselves first. I'd argue the same philosophy often holds true for early-stage investors and in fact has for folks like GroupMe

GroupMe founders, Jared Hecht and Steve Martocci dedicated personal time to build a service they wanted to use which caught the attention of seed investors and in a matter of weeks have raised $850k to build a business.  Jared shares the specifics of GroupMe’s founding on TechCrunch which also reported on the company’s launch.  I’m willing to bet none of this would have happened, or certainly not have happened so quickly with the caliber of investors involved had Jared & Steve knocked on doors with an idea & powerpoint looking for backing before they themselves took the plunge.

Next up for the Curbed Chronicles: Don't Be a Dick – mom’s gonna be so proud of that title - stay tuned...