Just wondering….

Boy when Seth Godin gets it wrong he really gets it wrong. Seth postulates that people should be willing to ignore n00b (new) customers or decide that some people are not a good customer fit for a product because they don’t “get it right”.

Seth is saying this because he wants to make sure that people don’t “bake the magic” of the product out in attempt to dumb down the product for the noobies.

Seth makes a key, common, fatal error. He assumes the product has to be the same for everyone.

Seth offers a few strawman arguments like “should symphonies have applause signs” or “not obvious what to do when you walk into a church for the first time”. Completely ridiculous statements that miss how society has evolved to handle n00bies in precisely these situations. A n00bie at the symphony or church looks around and sees what others are doing and they follow the lead of the crowd around them. If others are clapping after a masterful solo performance, the musically clueless claps as well - and learns to pay closer attention to the soloist. In the Roman Catholic church, a Protestant will learn to make the sign of the cross and kneel in the right places.

What great products need are what society uses in real world situations. Someone who spots the new people and offers to introduce to help them out. Microsoft’s bob was a lame version of this concept, but the principle remains a good one.

Think about the mental rewards of having pieces of the product reveal themselves to expert users. Rather than show everything all at once, hid the advanced features. Make it hard to find the advanced features. Keep the advanced features, even the link to the advanced features hidden. Make a little icon over in the corner unobtrusive for the new user. But as the new user becomes experienced, have that icon brighten and become more obvious.

The user gets curious and clicks on it. The service or program then reveals cool new features or expert settings options. All of a sudden, the user is in the in-crowd. They know something about the product that their friends don’t. They now feel special. They get to call up their friends and say “hey go to the second step and click on that little square.” or “move the mouse to the lower right”.. Whatever it is it doesn’t matter. Your users will now go on a easter egg hunt using your product. They will be actively incentivized to really become fans. They will go on message boards spreading the word about how to get to cool new features.

Think Easter Eggs not RTFM.

Remember most people are comfortably mediocre (intermediate uses) with your product. They start off as n00bies and they can easily transition to mediocre. But they have no iterest or desire to become experts. Their bonus is not determined by being an expert in the program or service.

The hard part isn’t getting n00bies to intermediate. The hard part is making them want to be experts.

Make your customers want to become experts — don’t turn them away when they are n00bies.

I used to work at LinkedIn. At the time I was there, one of the hardest problems they had was they did not know how to spot when a user would go from a few connections to thousands — or would always stay at a few connections.

Similarly you do not know who is going to be your future power users.

Interesting post from Paul Graham about the message and measure of success that different cities send.

This is my comment:

To the inverse question is also very interesting.- Specifically, what if a city *does not* send a message? To me that is the same as a company that can’t get its marketing message and corporate culture right. The city, like the company, flounders and “fails”. I used to live near Detroit. That city never recovered from the 1968 race riots. It could never re-discover its message of success.

If a city as a culture (not just a political entity) does not value something, then it provides no guidance to the immigrant (”new hire”). The resources to be successful are not visible nor readily available.

In SV, I would say the message is not “power” but action. Specifically, “Great idea. Have you built it yet?” This is why Cambridge as an “idea” center will not overtake SV. SV is about doing - and more importantly accepting failure as a step toward success.

For this reason, I do think that Silicon Valley must be the place to be in software — because software is the ultimate DIY tool.

Marc Andressen was praising dual-class stock structures in light of the Microsoft-Yahoo food fight. Rather than a dual class structure that is explicitly assigned to a certain stock certificate, I prefer AFLAC’s variation.

AFLAC has an interesting variation on this. They have a dual class structure but it is based on how long the stock has been owned in your name. If you have held the a share for 4 years in your name (i.e. not your stock broker’s name like is usually the case) then that share has 10x the vote as a share that has been held for less than that time. Stock plan document (item 18 on page 12)

This is the perfect poison pill defense. A “short term” speculator would have to hold the shares for 4 years in order to have a chance at a hostile takeover. A shareholder who has held the shares for 4 years clearly is invested in the company as a company not just a speculation vehicle.

At the same time this is extremely democratic, anyone could get the class B status by simply being a buy-and-hold investor.

So Sun keeps on trying to sell me boxes. I don’t need OpenSolaris, I need solutions! What is the difference? OpenSolaris requires someone who knows how to configure it, manage it, secure it, and adjust it for performance. But newsflash here! I am not a system admin. I am not a dba. And wait for it… I don’t want to be. I am a java developer and all I want for Christmas is a cheap ‘hobbyist’ hosting solution. Such a system will be perfectly adequate until Amplafi has the traffic to justify a more ’serious’ solution.

Today I can get:

• PHP
• (some) webserver to deliver the content
• MySQL
• Zero DBA experience required.
• Zero SysAdmin Knowledge needed(you don’t get a commandline anyhow)
• A just-upload-and-run-experience
• ~$10/month

Why can’t Sun deliver the same thing only running Java 1.6?

Why is that a hosted java application costs a minimum of $80/month? This is so wrong.

She heard this story and she shook her head and said, “Where do people find the time?” That was her question. And I just kind of snapped. And I said, “No one who works in TV gets to ask that question. You know where the time comes from. It comes from the cognitive surplus you’ve been masking for 50 years.”

So how big is that surplus? So if you take Wikipedia as a kind of unit, all of Wikipedia, the whole project–every page, every edit, every talk page, every line of code, in every language that Wikipedia exists in–that represents something like the cumulation of 100 million hours of human thought. I worked this out with Martin Wattenberg at IBM; it’s a back-of-the-envelope calculation, but it’s the right order of magnitude, about 100 million hours of thought.

And television watching? Two hundred billion hours, in the U.S. alone, every year. Put another way, now that we have a unit, that’s 2,000 Wikipedia projects a year spent watching television. Or put still another way, in the U.S., we spend 100 million hours every weekend, just watching the ads. This is a pretty big surplus. People asking, “Where do they find the time?” when they’re looking at things like Wikipedia don’t understand how tiny that entire project is, as a carve-out of this asset that’s finally being dragged into what Tim calls an architecture of participation.

Now, the interesting thing about a surplus like that is that society doesn’t know what to do with it at first–hence the gin, hence the sitcoms. Because if people knew what to do with a surplus with reference to the existing social institutions, then it wouldn’t be a surplus, would it? It’s precisely when no one has any idea how to deploy something that people have to start experimenting with it, in order for the surplus to get integrated, and the course of that integration can transform society (…)

So that’s the answer to the question, “Where do they find the time?” Or, rather, that’s the numerical answer. But beneath that question was another thought, this one not a question but an observation. In this same conversation with the TV producer I was talking about World of Warcraft guilds, and as I was talking, I could sort of see what she was thinking: “Losers. Grown men sitting in their basement pretending to be elves.”

At least they’re doing something.

Did you ever see that episode of Gilligan’s Island where they almost get off the island and then Gilligan messes up and then they don’t? I saw that one. I saw that one a lot when I was growing up. And every half-hour that I watched that was a half an hour I wasn’t posting at my blog or editing Wikipedia or contributing to a mailing list. Now I had an ironclad excuse for not doing those things, which is none of those things existed then. I was forced into the channel of media the way it was because it was the only option. Now it’s not, and that’s the big surprise. However lousy it is to sit in your basement and pretend to be an elf, I can tell you from personal experience it’s worse to sit in your basement and try to figure if Ginger or Mary Ann is cuter.

And I’m willing to raise that to a general principle. It’s better to do something than to do nothing. Even lolcats, even cute pictures of kittens made even cuter with the addition of cute captions, hold out an invitation to participation. When you see a lolcat, one of the things it says to the viewer is, “If you have some sans-serif fonts on your computer, you can play this game, too.” And that’s message–I can do that, too–is a big change.(…)

And this is the other thing about the size of the cognitive surplus we’re talking about. It’s so large that even a small change could have huge ramifications. Let’s say that everything stays 99 percent the same, that people watch 99 percent as much television as they used to, but 1 percent of that is carved out for producing and for sharing. The Internet-connected population watches roughly a trillion hours of TV a year. That’s about five times the size of the annual U.S. consumption. One per cent of that is 100 Wikipedia projects per year worth of participation.

I think that’s going to be a big deal. Don’t you?

I was there at web 2.0 but I tend to bail on keynotes. Hat tip to open left.

Moderator:
Vineet Buch, Partner, BlueRun Ventures

Panelists:

• Charlene Li, VP & Principal Analyst, FORRESTER RESEARCH
• Jason Oberfest, VP Business Development, MYSPACE.COM
• Sergio Monsalve, Principal, NORWEST VENTURE PARTNERS
• Deborah Shultz, Strategist, DEBORAHSCHULTZ.COM

Charlene:
10million uniques/month for general advertising models.
marketing plan can’t just be PR

Jason:
You have to prove engagement. Repeated interaction.

Deb:
Need to measure consumer touch points ( how many im message, email to customers)

Sergio -
Measure the lifetime value of customer. time * usage discounted over time.
net lifetime value of customer ( subtract out acquisition costs)

Vineet -
to get a large audience — go broad.
to get an engaged audience — go deep.

Sergio:
subscription model really works where there is an urgency (dating, job posting)
depth of value proposition.

Vineet:
is a 1m users on a facebook widget good? not so — very short half-life of engagement with facebook apps.

Charlene —
with facebook apps - there is not a strong corrolation between user inviting friends and actual satisfaction with app.

whats to see value in the applications that are valuable.

Sergio -
we have not yet penetrated to the Gen X and Baby Boomer — so hugging and poking is not very useful.

Charlene –
Things there is space for a company to move a review from facebook to amazon.

Deb –
getting and extracting reviews is an issue.

Jason –
apps in myspace are requiring apps earn the ability to reach larger audience based on how initial users react.

Charlene –
Walled Gardens don’t survived — Apple is only sustained exception.

Good business model example–
Sergio -
Affinity Labs - unusual business model — they make money with lead gen. (military.com - stay connected with fellow soldiers, retraining, and jobs)

Charlene -
MerchantCircle - SEO zero aquisition cost. - small business SEO - they get a president of a local chamber of commence to act of a sales person

Deb -
etsy.com
Blogher.com

Panel:
Nicolas Kardas - sr. product manager windows live platform (microsoft)
jim Scheinman (EIR - CRV)
Steve Jang CMO & Hwead of Business Development Imeem)
Mark Silva, Founder/Manage Director Real Branding.

Super models:

facebook, hi5
social media - helping social media companies make money

Next tier:
rockyou and slide
Nicolas Kardas - likes Netflix - people read views.

Dave McClure — Netflix - Social Commence But agrees.

Steve Jang - IMEEM - rockyou, slide have outsourced user authentication and registration (using facebook)
imeem: 25 million uniques/month - .com 75 million uniques/month from widgets (social networks)
meat of revenue - direct sales of ads.
adsense is just for inventory fill.

Mark Silva -
existing traditional ad agencies are big and stupid
Flixster - 25K users will friend a movie
300K users will thumbs up a movie on flixster. Flixter prices ad packages $25K, $50K, $100K packages - makes it easy for ad agencies to do check box ad buys.
ads needs to make themselves relevant on the social graph interrupt ad model is going to go away.

Nicolas: sees social network as a way to know their user. because they know music.

Dave : CPC - pay per click does work on social network. But Flixster is driving brand awareness.

Mark - pay per click - adsense makes sense. (transaction)
CPM -is in resurgence in social media.
Category vertical focused - (flixster)

Jim Scheinman - EIR CRV.
if u want to reach young demographic - (13-35years) you have to go social network sites.
All the teen magazines are shutdowning.
On vertical markets CPM does work.
can we put the brand in from of the users and have consumers be your advocates.

Dave McClure:
long tail of social networking/marketing to amplify a brand.

Jim –
bebo conversion rate from free to premium users is usually < 1%
Steve Jang — 4x 5x click through rate of putting brand on ??? (something - widgets?)
Metrics seem to really be missing with evaluating value of social networks:
is it installs?
is it plays?
“interaction/engagement rate”?
“impressions”

Steve –
Destination websites still have value / the widget side have cool new opportunities.
Dave — saying widgets are “cool” means you don’t have a business model on widgets yet
Mark — sees mobile as a platform not a media.
Jim — overseas mobile is a huge deal.

Dave — Social Commerce is where it will be at — slide and rockyou will be enable someone else’s commerce