Xmarks the spot

So Xmarks, the bookmark synchronization startup is going out of business. There’s a long and illuminating post here by Todd Agulnick, CTO & Co-Founder about why despite having 2 million user and growing at the rate of 3,000 new users a day, they are folding up shop January 10th, 2011.

It’s a sad story, one you want to learn a few lessons from so you don’t one day have to write your startup’s epitaph.

What went wrong?

Market Research of One

Todd build Xmarks (then called Foxmarks) because his friend and mentor, Mitch Kapor (head then of the Mozillia Foundation, founder of Lotus 1-2-3, Silicon Valley legend), asked him to. Mitch like a lot of people back in 2006 found that there was no good way to keep your bookmarks synched between browsers and machines. Todd built it, and before long, 5,000 people were using the prototype.

Clearly they were on to something. They turned the prototype into a startup, secured VC money, started doing all the right things. Got buzz, even got a slot at the startup beauty show, DEMO. They were hot! hot! hot!

But were they, really?

The most telling quote is this: “There’s a scalable business in here somewhere,” we told ourselves, and we were determined to find it.” Off the mark as fast as possible (got to grab that first-mover advantage), Xmarks got everything right on the development side and nothing right on the find people who will pay us money after we burn all the VC bucks side.

From what I can tell, Xmarks market research – including finding out what customers would pay for the service – consisted of Mitch saying he needed it, Todd building it and nobody looking for the customers’ wallets until it was way, way too late.

Advertisers will buy eyeballs – maybe

As the story of Xmarks unrolls, Xmarks tries to find a way to cash in all those bookmarks in aggregate form they called “the corpus.” Surely, advertisers with their insatiable hunger for more eyeballs would find some form of advertising irresistible? Nope. “We spent the next year turning over every conceivable rock looking for ways to use the data in our corpus that would prove compelling to our users and revenue-generating for us,” Todd says at one point.

There’s a certain mania that hits some startups: an almost religious belief that “the advertising model” is the Holy Grail and all they have to do is pour their users into the gaping mouth of the advertising machine and riches would flow. Guess what? Not so much.

Some people are like me – I hate advertising, always have. Avoid it whenever and however I can. Advertising is increasingly exposed as what it is: a pitiful substitute for real engagement. What’s more, now that media has fragmented into hundreds of cable channels and tens of thousands of online channels, advertisers can pick and choose who to bestow their money on. Or not.

The Takeaway

I wish Todd, the Xmarks team, Mitch Kapor and all only success in all future endeavors. But learn this from their pain: There isn’t a market for a product unless people are willing to part with their cold, hard cash at some point. Make sure there is before you start believing your own press releases.

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Bob WalshXmarks the spot

And here we go: MicroConsult with Bob Walsh

I think I’ve come up with a way to take your self-funded startup or microISV to the next level. I call it MicroConsult with Bob Walsh, and here’s the gist:

  • A one hour consultation via Skype/phone to define your biggest startup pain - market research, productivity, your web site, whatever – and collaboratively build a checklist of 8-10 specific, measurable tasks that you can do to make that pain stop, or at least hurt a lot less.
  • During that hour, you and I are going to nail down exactly what you need to do, set a deadline, make sure each task is well defined and doable.
  • This checklist will be in the form of a shared checklist on Checkvist.com (you’ll need a free account with this awesome online outliner). Why there? So we can both see as you work on your checklist. Also, I will be keeping in touch and keeping you focused on completing that checklist and getting the desired results.
  • You book a MicroConsult via the widget below, answering a few pre-consultation questions and paying via PayPal/CC for that hour ($147 USD).
  • At the end of that consultation, if you don’t feel you’ve gotten your money’s worth, I’ll refund your $147 there and then.

Does it really work? Here’s what my first MicroConsult with Bob Walsh client has to say:

“As someone trying to get my self-funded startup going, both time and money are at a premium. I tried a MicroConsult with Bob Walsh because he had an outstanding reputation and I honestly did not have the time to read through hundreds of pages of potential useless or redundant material. Bob’s advice got me on the fast track to meeting my goals. Once I work through the checklist that he and I created, I plan on scheduling another session in order to help me get to the next stage in my startup’s life.”
Justin James, founder of RatCatcher

 

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Bob WalshAnd here we go: MicroConsult with Bob Walsh
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And here we are

Update: if you are seeing this particular post, 47Hats is safe and secure in it’s new servers!

If all goes well and DNS propagation happens this weekend, the next 47Hats post will be fromt our shiny new awesome domain at WPEngine.

After putting up with godaddy’s inexplicable slowdowns, unpredictable site outages, db hangs, email timeouts, and other frustrations, moving to a startup focusing just on hosting WordPress right, run by people I trust, with customers I respect, will be a huge relief.

Look for the rollout of my new service from its new home on Monday!

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Bob WalshAnd here we are

This is not about that.

Last night Twitter announced its awesome new web page layout/functionality.

This morning, like a few million other Twitterers, I started banging on my twitter page because I want the New and Shiny, and I want it now. New and Shiny beats productivity resolutions hands down, unfortunately.

But this is not about that – it’s about Ryan LeFevre (web developer, web designer, software engineer, and server administrator all bundled into one) and how he just cured me this morning of my latest New/Shiny productivity affliction. Am I Upgraded Yet? is a service Ryan created in less than 12 hours:

How does it work?We will periodically check to see if the new Twitter has been enabled for you account by polling the Twitter API. Once we discover you have been switched to the new account, we will send you a single Direct Message (from your own account) to notify you. This works best when you have Direct Message email notification on.

We will not publicly tweet anything on your behalf, cause that’s not cool. Also, please note that I give no guarantee as to whether the application will work. It is based off of an assumption about user info retrieved from the Twitter API which I’m 90% sure is true. Either way, it will not spam you with tweets or requests.

A couple things worth saying:

  • Add a bit of this and that, a few testimonials, expand to my choice of services and start charging $2 a month and Ryan will be in business.
  • Perfect example: startup opportunities happen at the edges. Right now social media is the bleeding edge and people will pay to solve a pain (I want my New/Shiny, where is it?) that did not exist 6 months ago before Twitter started eating its client app children.
  • First counts. Ryan is getting about 30 tweets a minute and is up to 1,681 new followers right now.
  • Want to beat Ryan at his own game, go for it. Better still, what other problems can you solve in my online life?
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Bob WalshThis is not about that.

Four Ways to Benefit with Social Commerce

By Richard Bashara,
Community Moderator at SoftCity

We’ve all made big-ticket purchases before. It’s pretty difficult to just get up one morning and do.  It takes lots of phone calls and price comparisons before you can pinpoint what you want and can afford.  After a few back and forth conversations, the consumer usually has some good information on where to go for reviews, where the lowest prices are and who might have the best service and warranties.

That’s Social Commerce.

Today, we look at how simple interaction leads to a more secure and manageable environment to make purchases and engage customers via tools available on social commerce sites.

App Stores Remove Sales Roadblocks

Social Commerce websites should provide the tools you need to sell your software, or they aren’t doing it right.

There should be a secure payment processor and an automated system for downloads.  There should also be a way to monitor when and how sales are made.

For example, some sites encourage developers to utilize a dashboard for tracking statistics related to the actual activity a certain thread of comments receives.  Don’t speculate on traffic and try to force users into doing something, judge activity based on hard evidence and work on increasing the interactions that lead to sales conversions.

Suggestion Selling

Looking at Google and Facebook it is obvious that commerce is shifting to the predictive search, one that is done before the user realizes they wanted something.

You know another term for that?

It’s called suggestion selling and it has worked in the retail sector for years.  The more involved you are with the customer, the better your position to sell them something they did not know they wanted.  Google Instant attempts to do this as you type, but doesn’t personalize the experience the way Social Commerce can.

User Feedback

You’ll often hear the mantra “ask them what they want and give it to them.”  Is it really that easy?  That depends on the tools at your disposal.

For example, SoftCity lets a developer use a series of polls to determine what the market wants.  Even this type of passive interaction helps grant more control over the development cycle by providing data instead of guesswork.

Time gets spent listening and releasing software rather than perfecting.  The key point to take away from this is to not fear the openness of a social network.  As for your image, address those concerns publicly and brand yourself as someone who listens and cares.

You also shouldn’t have to deal with complex stats, simplify your reporting through the data available on a social commerce website that will have a targeted user community to engage:

1.       Crowd Source your research

2.       Keep track of  social interactions

Good social commerce websites will provide access to these stats (or a method to acquire them).

Spend Less Time Developing a Community, More Time Developing Software

If your end user interaction and sales are all done in one space, you have less to worry about and more time to spend developing and perfecting your software.  You don’t have to chase leads; they already exist in your social space.  Your more passionate power users can even use some of their influence to convert others to your cause.

Social commerce can be rewarding from all interactions – from the novice, the power user and of course the developer, regardless of size.

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SoftCity is the first social commerce site dedicated to software. The site merges e-commerce with social media, creating a unique destination where software developers and users connect online.  Users can review software ratings and even chat with the developer before they make a purchase. SoftCity also hosts a constant stream of articles, discussions and comments from software enthusiasts and experts alike.  With each interaction, SoftDollars, are earned which can be used on the site for additional software discounts. Visit www.SoftCity.com and become part of the first community for software enthusiasts.

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Bob WalshFour Ways to Benefit with Social Commerce

How to frighten a startup founder..?

Just whisper to them, “How is your market research going?”

Their eyes will widen, blood pressure rise and sweat will break out on their brow.

Of the very approximately two thousand startup founders I’ve talked with over the past 7 years, I can count on my fingers and toes the number who with premeditation did market research before they started coding. I didn’t. Twice. Yet, if I had to pick one factor out of all the possible indicators for startup success, it would be doing some decent market research before you build.

So, along those lines, I’d like a few minutes of your help with my market research on a new service, before I build it. Nothing to buy and no obligation, but the first 20 respondents will get free six-month StartupToDo.com memberships (regular price, $105) – it’s that important to me.

Please take just a few minutes and complete this survey: http://www.surveygizmo.com/s3/364832/SoftwareStartupCoach-com.

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Bob WalshHow to frighten a startup founder..?

Time to start writing a new book…

I tend to write books when something in my life is very painful. My first book was dealing with the pain of all those non-programming things you have to do to sell commercial Windows desktop software; my last was getting my head around what a bootstrapping web startup needs to do.

The pain I’m feeling right now is huge and growing sharper day by day. Social media, Internet disruption, the Media Tsunami, infinite information and a thousand-fold increase in people and things wanting my attention is smashing into the old industrial ways I’ve depended on to be productive, make a living, get things done. It’s like watching the tide wash away the sandcastle you live in: increasingly, the ways to make value, communicate, get things done, build, connect don’t work. Or, they now work so badly they’ve become part of the problem: remember when people thought email would make individuals and companies more productive?

The New Productivity: Producing Value in the Internet/Social Age” is the working title. (I just bought thenewproductivity.com :)). It will not be an Apress book. It might not be a physical book at all – it belongs on Kindle/iBooks/ePub. But I’m going to go out there and see who else is feeling this pain and try and find some answers above and beyond the millions of existing tips on the web on being “more productive.”

Comments, suggestions, sharing your pain in hopes I can find something that will help are most welcome on this post or via bob.walsh@47hats.com or@bobwalsh.

[photo credit]

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Bob WalshTime to start writing a new book…

35 Hands are better than 2

The Iron Law of running a startup or microISV is there’s never enough time to everything, especially the important but non-critical stuff. It takes lots and lots of time to do the strategic stuff – often you have to pump in some unknown number of hours just researching.

That’s why I’m excited by Fancy Hands – it’s fixed price virtual assistants for simple but time-consuming tasks. I recently used Fancy Hands (15 tasks per month for $35) to kick off two projects that have been stalled forever: engaging more with other startup bloggers and social media bloggers. Before you can engage, you have to know who to engage with – and that’s an easy task to hand off to someone else and get “good enough” results.

All it took was signing up with the service (FH uses Google Accounts for authentication), then send them an email for a task:

  • Name, email and blog URL and name for the top 25 Social Media Bloggers.
  • Name, email and blog URL and name for the top 25 software Startup Bloggers.
  • (something private)

Here’s something worth mentioning: total elapsed time between putting in these two requests (and a third) and getting results: 45 minutes. Put another way, for that 45 minutes it was like having 3 Bob VMs running in addition to yours truly.

Fancy Hands isn’t a virtual bookkeeper, fashion consultant or speechwriter: they focus on scheduling, web research, making appointments. But getting 15 of those things off your plate for the month is worth a lot more than $35 or the X hours it would take you. Here’s some of their most requested tasks:

  • Restaurant Reservations
  • Scheduling a car service / taxi pickup
  • Find the nearest place that has iPads in stock
  • Find the advertising rates (or contact info) for the top 10 [industry] blogs
  • Schedule a haircut with [stylist] on Friday after 1pm
  • Call [three bars] and find out if they have a private room available for rentals
  • Call [primarily offline company] and get the status of order number xyz
  • Find a couple upholsterer options near where I work
  • Call TD Bank and ask how many checks I can use for free on a standard personal account
  • Call some hotel and extend my stay for three nights instead of two

I’ve been cajoling Mason Levey to add a more technical track to deal with the real IT pains in my butt like:

  • Why are my iCal alarms doubled up?
  • What’s the best online service out there to let people fill in a short questionnaire and book my time?
  • A proven recipe for setting up 3 WordPress blogs on a new VPS.
  • Best current tool for winnowing out low value Twitter follows?
  • What’s the best automatic Twitter background maker out there?
  • What should my Facebook privacy settings be?

There’s a huge market out there for these kind of Internet-related tasks – not just startups and IT people, but all those hundreds of millions of people out there being pulled day by day and step by step into our net-centric world. Give Fancy Hands a try (and here’s a StartupToDo.com Guide on Fancy Hands with a nice discount code), and bug Mason to offer an IT track: it would be awesome!

(P.S – and if you can make any of those IT pains go away, let’s talk: bob.walsh@47hats.com.)

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Bob Walsh35 Hands are better than 2
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Continuous Partial Exercise

I’m about 40 pounds overweight; worse, odds are good you are too.

If you are reading this you probably spend your days in front of a computer, your nights in front of a computer and year by year your weight is creeping up.

The old industrial way to stop looking so bovine was to go to a centralized facility on a regular schedule (a gym) and perform specific movements in a specific way. As an added bonus you might meet a someone attractive.

Worked for me 25 years ago; not so much now when I’m dealing with ten times more work, a hundred times more people and a thousand times more things clamoring for attention.

With apologies and kudos to Linda Stone and her meme of Continuous Partial Attention, Factory exercise is so 20th century. It’s time for Continuous Partial Exercise. Spend a few bucks and load up your iPhone with Hundred Pushups, Two Hundred Squats, Two Hundred Situps and for extra credit if you have a chinup bar, 20 Chinups. When you’ve been working for an hour or two, fire up one of these apps and do it.

Don’t have an iPhone or don’t like these apps? There are others. If all else fails, find a fitness site with a mobile interface.

If your manager asks what you are doing, tell them your lowering the company’s health care costs. If the office Mr. Negativity chimes in, tell him you’re planning to outlive him. If someone cute asks you, ask them to join in, or invite them to do some social group exercises like Robert Scoble is.

The point is use disruptive postindustrial technologies to disrupt some of that fat that’s dragging you down.

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Bob WalshContinuous Partial Exercise
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Reducing Decision Fatigue

The brave new world we are building online has it’s share of brave new problems:

  • Does the Internet remain a level playing field or do large corporations “help” it by picking and choosing whose bits are more important (theirs)?
  • How do we deal with the Media Tsunami that is growing to truly apocalyptic size day by day?
  • Humans can only make so many decisions a day: after that our brains turn to mush. Between the web and social media, our supply of decisionmaking is wiped out before we start whatever we do to earn money.

He’s one answer to that last problem: reduce the number of trivial decisions you make each day by making checklists for all the routine stuff. Then instead of wasting XX decisions feeding the cats every day, you conserve those decisions for things that matter.

Thanks to MacRae Linton for turning me on to Checklist Wrangler today – it’s far from perfect, but if you pair a bluetooth mac keyboard to you iPhone, you can easily and quickly make checklist templates that will auto generate as you need them. Not a perfect solution, but it helps reduce decision fatigue.

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Bob WalshReducing Decision Fatigue