Category: Technology

The Trojan Horse into smart homes is Voice

The fight has been underway for some time by hardware and platform companies to get into homes for more data, more control, and more share of wallet. The attack vectors have been things like home entertainment systems (think Xbox or Playstation), smart appliances, smart TVs, IoT (think smart light bulbs), and now voice assistants (Amazon, Google, Apple).

For the first time after getting the following email from Amazon announcing Alexa calling, directly following the launch of the Amazon Echo Show, I think Amazon has a real shot and pulling ahead in this race.

The below image helps explain why — they are connected your address book to the hardware system that you maybe use with a few other devices and your music service.

Email from Amazon announcing Alexa calling

You see, the real Trojan horse (voice, get it?) is putting a handy device that is novel and cool, that has marginal utility and building on it piece by piece.

Every week I get another email from Amazon announcing a new skill that does something on the Alexa. The novelty and wow factor make the Amazon Alexa appear exactly as it should at first glance — a toy.

A few choice reactions after seeing an Amazon Alexa for the first time (I was an early adopter)

“That’s dumb” — a friend who how never seen it before

“I’m not using that” — friends before I hooked up Phillips Hue to it.

“Do we need it in the middle of the living room” — my wife before I integrated Spotify

With the smart upgrade Amazon now has an incredible missing link that closes the loop on many levels — my address book and contact list (good news they added call blocking). Now Amazon can know who I am connected to, who I communicate with most often, and who I spend my time talking to.

Convinced this is genius yet? Or are you totally creeped out?

A few voice devices trying to capture the home market in a Kit I created

The reason I think Amazon is a tech titan ready to take out so many startups are moves like this. How many have tried to link up a social network + hardware device + purchase ability all in one? Who has a chance against Amazon?

Now with an Amazon Echo Video + my address book + my order history = the time for owning homes is upon us.

I thought some time ago that the trojan horse to home automation was the Amazon Dash buttons but I was wrong. The adoption of integrated buttons into washing machines for Tide never materialized. The world of other buttons showing up to control my home never came out. Instead and hardware device that is perfect for Father’s Day, now has the added capability to be useful everyday.

This move feels like the beginning of the ecosystem that became Prime Shipping and Prime Video.

Prime Video as an add on was a no brainer to “test and try” for Prime customers. Now however you have people signing up for Amazon Video and testing Prime! This has to be the greatest trick Amazon has ever pulled…until now.

My hypothesis around this is that Amazon is aiming to be the central entertainment and commerce hub we were promised in the late 90s.

Anyone remember the AT&T You Will campaign?

Nobody could pull this off until now because there was no utility. Back then it felt like trying to sell the first fax machines — sure one day when everyone has one I’ll get one too. The Networks effects of voice hardware are finally kicking in.

They did it by getting a marginally helpful voice controlled hub connected with everything you love then sprinkling in features you can’t live without.

In my thinking on Team, Time, and Tech — Amazon have nailed all three and my prediction is Amazon is trying own the “Home as a Platform” or “Home OS”.

Playing catch up here are Microsoft, Google and a distant Apple.

Hardware as a SaaS business (HaaS?)

With CES in full swing, I have been thinking more about hardware businesses that have a SaaS component for ongoing revenue and support. I have personally experienced this with a Dropcam (now part of the whole Google Home system so technically a Nest Cam) that was an initial hardware purchase($199.99) with a $9.99 non-required component to get a 7 day history of content the camera collects. This is a great example of a hardware sale that probably happened at a nominal profit (maybe loss?) that is definitely now “in the green” because of my 2+ years subscription. The simple math is that $9.99 x 24 = $239.76 which has cleared the price I paid for the device. I forgot the original source of my purchase, but there was certainly a low CaC for them.

The latest I saw today was the Norton Core which is a device from Symantec that is a home router that has a $99/year SaaS security service. In a world plagued by malware and networked devices being taken over, this is primed to prey on the fears of IoT owners. It is unclear to me how it protects those devices.

I see this as becoming the norm, as more connected devices have a support requirement that goes beyond the purchase from a shelf/ecom store. With OTA updates happening in cars, firmware updates being required, and a list of other requirements to keep connected devices up to date, it is clear that companies need this revenue stream to sustain this support. Embracing this outcome vs. shunning the inevitable “smart” everything. Just see Internet of Shit for some hilarious tweets. I take a positive approach which is; how can this business model affect small startups entering this space, and what can we learn from building businesses this way? Can hardware costs come down to $0? Can a locked in monthly SaaS fee cover the business model needs of a new startup to compete with a large hardware co? Does this introduce a new business model for crowdfunding a product? Time will tell.

Other examples include things like a FitBit which has a physical cost, then an upgrade to “pro” with a monthly subscription underneath. Loss leading hardware products have always been around but seeing a proliferation of options and scenarios brings me back to the early 2000’s where folks were giving away computers/laptops for the option of a monthly subscription fee + advertising on top of it. I have always appreciated this model — even if it resulted in some of the biggest failures of the dot com era. Anyone remember eMachines?

Good examples of this include networked cameras, wifi routers, smart watches, phones (financing or data contracts), readers/tablets, and more. What am I missing?

The biggest issue is bringing a product to market, getting initial sales, and getting folks over the penny gap of a monthly subscription. Not an easy feat, but if you can do it and have low CaC and high LTV it makes for a great blended business model of Hardware + SaaS (HaaS).

Product Hunt – Part of Your Launch Plan

I submitted Ando today to Product Hunt, which is a new restaurant that is delivery only co-founded by David Chang (from Momofuku)  and Hooman Radfar. Check it out Ando on Product Hunt for a special combo for those in NYC.

Ando

Since I have been submitting products for awhile now (10! see below), I thought I would share my thoughts as I have been a fan since the beginning.  I went through my old emails and it seems that Product Hunt came onto my radar when it started.  I remember signing up and giving some feedback to Ryan Hoover, who is incredible at interacting with his community.

Product Hunt

Given that Product Hunt has provided so much value to me, I wanted to share my thoughts on how it should be included in a launch plan if you are launching something new.  I am very thankful to the PH community for always asking great questions, submitting great feedback, and being open to participating in things I submit.

What is Product Hunt?

Product Hunt is a great way to share something special with a focussed community that is very active and helpful.  I typically lean towards tech oriented products and services, but they are doing a great job of building a platform to support many different categories. There is a focus on getting participation from the creators, or Makers, of products which gets real questions and answers – something missing from a lot of other places.

Why Product Hunt?

I have found that having PH a part of your launch plan is very helpful for a few reasons;

  1. Forces you to get organized – you need to iron out things like descriptions, one line explanations, how you will handle FAQs, and overall vision.
  2. Forcing function for launch – I always tell folks to launch things on Tuesdays away from other big events (think WWDC) and this gives you a launch date which is great for teams to rally around.
  3. Feedback – The community is great and you will get a TON of great questions and comments from all kinds of folks.
  4. Attention/PR – Obviously, but down on my list as I don’t think its the main reason to participate.  This gets you on the radar of people who write about your app or products category and helps tell the market about what you are working on.

When should you post on Product Hunt?

As the saying goes “If you are not embarrassed by the first version of your product, you’ve launched too late.”

hoffquote

Once you are ready to have a public beta and get real feedback, its time to share it with the world.  I alway recommend posting first thing in the morning, the earlier the better, so you can check it off your list and get onto other things.

Who should post on Product Hunt?

The “Makers” of the product, service, feature, app, or “thing”.  This doesn’t always mean the founders.  Some of my favorite posts are from people that are not the “CEO” or “Co-Founder” of a product.  Obviously near and dear to my heart because I worked there for so long was the comment from one of my good friends Jonathan Crowley, now head of product at Foursquare about big changes in Swarm.

How should you post on Product Hunt?

Posting on PH should be a part of your Launch Checklist.  If have spent time with Naveen Selvadurai (partner at Expa) he will talk to you about the importance of checklists and probably hand you a copy of The Checklist Manifesto.

By making PH a part of the checklist you will get things organized and completed the right way.  This is certainly an entirely separate post, but the gist of it is to have a list and make sure you have an owner and a timeline.  Thinking that you can throw something together is not the right approach.  Rather, its a great way to coordinate sharing what you are working with alongside things like an official blog post on your own site, coordinating with any social media accounts you may have, and if you can outside press and embargoes.

Screenshot 2016-07-10 20.50.46

Finally, I wanted to share that although some of these projects have been my own, I am especially proud of seeing friends and companies I advise launch on this platform as it has been so valuable.  From meeting prospective hires and investors, to connecting with competitors and others who have tried similar things in the past the community is incredible.

Finally, I thought I would share what I have posted which is also a fun walk down memory lane…

  1. Skillshare for iOS (my friend Mike’s company – he didn’t know I was submitting!)
  2. Casual Spectator
  3. LRN
  4. Input
  5. Metabase (Expa Studio)
  6. Kit (Expa Studio)
  7. Abovo42
  8. Spatula
  9. Current (Expa Studio)
  10. Ando

 

 

 

 

 

The Right Time + The Right Team + The Right Technology

Team Time Technology

 

I have been working with a number of early stage teams going through various stages of fundraising and using this diagram to help explain my thoughts on some of the questions they will come up against.  This is certainly not all inclusive, but it helps me outline the key points that I think must be overcome by an early stage team to convince an outside party to invest their capital in their company.  Many of the questions and comments I have seen happen in pitches fit into this venn diagram.  The best example I have of this is looking at what happened with YouTube; it came about at the right time, with the right team, and the right technology. However one of the only things they could control was the team – assembling the right people to take advantage of market conditions.

The Right Time
Starting a business at the right time is almost completely outside of someones control.  There are multiple macro/micro economic factors that can contribute to success or failure.  However, I say almost as there are indicators that can be used to see if an idea has a shot at working – either something that has failed in the past, or something completely novel whose time has come.  In the case of YouTube there were countless other examples of online video providers, some during the dot com boom, that didn’t quite make it.  Why not?  Well, for starters I don’t believe there was the ubiquity of broadband that existed in 2004-2005.  If you had a video site in years past with a dial-up service there was no video compression system in place yet that would bring quality and convenience that people needed to actually use and browse a site effectively.  There was also no hardware to make small videos at the same pace as the mid 2000’s.  Think about the explosion of digital video recorders (remember Flip cams?) that happened right around the time of YouTube launch.  Using the Flip example (launched in 2006) there was suddenly a very affordable digital video camera that you could instantly connect via USB.  The next logical progression of this video content explosion was a place to put it – enter YouTube.

The questions associated with this circle for me are;

  1. Why is now the time this Company will succeed? (vs. 5 years ago or 5 years from now)
  2. Is the market ready?
  3. Are customers ready?
  4. Are there enough buyers/sellers today?
  5. Is there some special moment happening that makes this the right time to exist?
  6. What external factors could help/kill/affect what your roadmap looks like for the next 6 months?

The Right Team
I believe that the first 10 people at any startup will make or break the Company.  I know this is a strong statement as people change roles all the time, and I need to get my thoughts fully written down on it, but it has been my experience thus far.  The first set of folks usually set the culture and cadence of the entire operation.  If you look at most early stage companies there are usually a few people that make a 10X difference in the early days and end up leading the teams and departments later on.  This is not always the case but when a core founding team departs an organization it is hard to understand how the heart and soul of a company isn’t gone too.  If this happens years later and there are new leaders in place, this can be the right time for them to leave and its actually a good thing for a Company.

Digressing back to my example, YouTube was founded by 3 early PayPal founders that experienced a real existing pain; there was no place to share and view videos online for recent events.  Whether you believe the dinner party story or the news events story (more here) doesn’t matter – the reality is that there was no place to house and share video online and this team was well poised to find the solution.

The questions associated with this circle are things like;

  1. Why this team?
  2. If someone else got $XXM, could they assemble a better team? Do what you are doing faster/slower? why/why not?
  3. What makes this team well positioned to succeed in this market over competitor X, Y, Z?
  4. Who is missing from this lineup?
  5. Who are the next 5 hires you are going to make if this funding comes through?
  6. How are you going to compete for talent against X, Y, Z?
  7. How are you going to retain this group?

The Right Technology
This is a contentious circle for some as some investors rely on the tenacity and vision of the founders over technical abilities.  In my experience being brought up around a thesis of having strong technical co-founders its hard to get away from.  Aside from the abilities of the people, the real question here is around the state of the technology being used and many external factors.  Coming back to my YouTube example there were again strong external factors that were beyond the founders control that made its success possible.  The first is that there was an explosion browser based video players that were found in almost all computers – Adobe Flash.  Say what you will about the players today (they are on the severe decline), around the time of YouTube it was incredible.  With most systems having the player, YouTube was able ride on the coattails of a ubiquitous player that could handle and stream video on most big platforms.  Previously used for interactive and complicated websites, the Flash player for video was perfect.  People could get video buffering in the background with their broadband connection and see basically “live” video without the previous problems of downloading and dealing with codecs and corrupted files.  The technology used here matters as there are tons of carcasses of online video companies from the dot com boom that didn’t survive as they didn’t have the right technology in place.

The questions associated with this circle are things like;

  1. Is this Company using the right technology to solve this problem?
  2. Is the world well equipped for this technology to be brought to market? (Flash/YouTube example)
  3. Do you have in house technical talent, or is the technology somewhere else?
  4. What is the defensibility of this technology?
  5. What breakthroughs are you waiting for? Holding you back? Are you driving?

This is certainly not meant as an all encompassing series of VC questions, but it helps me wrap my head around where a Company is based on their answers.  The center of this venn diagram defines for me that this is something worth taking a look at.

Contact your own customer service system

Things get done when the people who can affect change experience pain. What I mean by that the people that are most able to fix problems are the people in an organization who probably have no idea that it is happening. Therefore I believe every Founder or CEO should contact their customer service centers, as if they were a customer, immediately.

call-us-1049266_640I recognize that a call to have CEOs dial their support lines may not happen by the likes of the Fortune 500, but my hope that one person who reads this will go through their support channels today and make improvements.

Almost all call centers can be improved but the metrics, dashboards, anecdotes and discussions in conference rooms are blocking progress. If a company leader spends time on the first point of contact, or perhaps the point where a customer is most in need, they will find a place to spend cycles that will help their business. There is so much energy spent on all the customer touch points; phone, email, txt, live chats, and more – but it feels most are spread too thin.

You don’t have to look far to find companies with customer services woes. Comcast and Time Warner are notorious for having bad customer service. The first line of defense here is the phone support system. This is a power law in action that is not being fixed. If they spent cycles on the single point of contact people hate the most, would it have halo affects on the rest of the business? My answer is yes.

I have a had my fair share of customer service woes and I am usually pretty good at solving them. So much so that people that know this about me get me involved when they can’t make progress. It’s not always just about “talking to a supervisor” but goes into how you communicate and why.  I believe in the halo affect that a good product or a good customer interaction can have and this feels like an easy way to make customers happy.

So whether its by phone, email, livechat, or other means – contact your customer service team to see what the experience is like.  If its perfect that you can scratch one more thing off your todo list 🙂

It’s the questions not the answers

Slack recently had an outage, which happens to every company, and people noticed on Twitter – wow what a reaction!

I was reminded a lesson I learned from Brad Burnham while I was at Union Square Ventures; it’s the questions and conversations that are important, not the answers. 

This came about from Brad as my colleague Andrew Parker and I were arguing over whether or not we should be checking in to a place on Foursquare.  We had gotten takeout/delivery (I can’t remember which). Following the “rules” you should check into places that you go (hey, this was before Swarm ok?). However we definitely purchased something from the restaurant, so didn’t that warrant letting them know? There were clear benefits; sharing on Twitter/Facebook, letting the business know, training the Foursquare system. There were also plenty of challenges; the location services may count this check in as “cheating” given we were so far away, we weren’t technically “there” if someone came looking (this happened a lot in the early days).

The list for both sides goes on. I think this is where Brad jumped in and stated that it didn’t really matter who was right or wrong – he was much more interested that the discussion was taking place. He said that many times it’s not about having clear rules for digital games, but rather the constructs make people think, and question – the discussion is the most important.

This brings me back to Slack; watching the reaction of people was fascinating. It didn’t matter if it was an outage, a hack, an AWS problem (I don’t even know if they are on Amazon) but rather that people noticed. Being in the zeitgeist vs having hype are two totally different things. This downtime brought companies to their knees, and people couldn’t work without it. That’s the most important thing to notice. I am sure we will get an explanation and post mortem, but people will still be using Slack. It reminds me also of the Twitter outages of the early days – only now there is a place to complain! (On Twitter – how meta)

As I look at companies both through my operator and investor lens, this discussion is the strongest signal to Slack dominance and usage across organizations and companies.   

Many see the valuation and argue, I see the discussion and see value.

The State of US Tech Funding

The folks at Andreesen Horowitz and Benedict Evans put together this great presentation on The State of US Tech Funding.  It is embedded below and a lot of it rings true for what I am seeing.

 

I also agree strongly with Slide 39, that more smaller rounds are happening
Smaller Rounds
With the companies I advise, I have seen more of them raising a higher quantity of rounds at the so called “seed” stage.  The synonyms and nomenclature behind these rounds are also changing.  What was before a seed round is now a friends and family round.  Some even call these activities genesys rounds, or pre-seed deals.  Whatever the language, they are happening more frequently at smaller amounts – to my knowledge.
I also agree that while creating and scaling a software business is getting cheaper, reaching a larger online market is a growing challenge.  There are more SaaS tools and mobile marketing programs to use to “make it easier” but these end up adding to the burn of these Companies.  I jokingly referred to this trend as a re-distribution of funding via expensed $20, $50, and $100+ monthly SaaS plans happening between each company (no, thats not really happening but it is on a very small scale).
Great presentation to dive into to get a nice comparison between now and then, and to form your own opinion.

Running apps for beginner runners

The state of running apps has certainly changed.  I went running Sunday for the first time in years, and wanted to see what the latest and greatest options were to geek out while running.  Three apps, 2.5 miles and 25% battery drain later I had a pretty good first run in awhile – both myself and with the apps.

I went with a combination of RunKeeper, Spotify (new running feature), and Nike+ Running.

It was actually very interesting to see the discrepancy between apps regarding time, speed, distance, GPS, and other features they all had.  Below is a maship of Nike + in app – the final result overlaid on the route I took in Central Park then a pic from the end that lets you put the trail taken on top of a picture.2015-06-07 15.57.09

Overall I would say I was pleasantly surprised from the progress of apps of 3-4 years ago (the last time I really used any). Many of my accounts were still dormant with my previous runs/workouts still in them.  Its amazing to think this data is just sitting there. Many have built in game mechanics now, reminiscent of the early Foursquare days, integrating milestones, badges, and social cues to stay motivated.2015-06-07 15.55.33

I would say that one of the cooler features I used was Spotify Running.  It seamlessly detects the tempo you are running at, and mixes the music to match.  Its a good motivator if you start to hear things slowing down, and a great “a ha” moment when you are going fast and the music picks up.  There was even a moment where the background sounds perfectly matched each of my steps and I thought it was the sounds of the trail I was on, but it was actually the music – great stuff.

Using multiple apps is certainly a battery drain, and switching between them while running is all but impossible.  I believe the results are worth the charge time and cumbersome nature of using multiples.  I also worry about data lock in and companies shuttering these services.  The good news is that most of the apps have integrations back into Apple Health and therefore there is a parent cloud record of what happens.  Of course the same could happen with Apple but I doubt it.

I didn’t activate any of the social posting features just yet, or join any “teams” or groups.  I think there is an aspect of putting yourself out there publicly to stay motivated and have been encourage you or comment on your runs.  I see friends doing this often and sharing they beat their latest distance/time/other and it seems to work.  I have a long way to go before this becomes a habit, but its a start.  Being near the park helps the most.  Until next time…

2015-06-07 15.23.50

Building the Sales Machine Event: Bryan Rutcofsky from Yext

We recently hosted another Building the Sales Machine event at Foursquare HQ and it was great to see so many people working on building sales and revenue from NYC and other great places.

A big thanks to Bryan Rutcofsky from Yext for coming out for a great Q&A session about the early days, and getting tactical for the audience about how to build and retain a sales team.

We covered a broad range of topics including;

Validating a sales model
Going from 1 salesperson to 2 and scaling up
When the right time to outsource a sales team
Where to spend time
Deciding who to sell to
What sets top performers apart

Any many more!

We are trying something new this time and editing the videos breaking apart each question into its own piece of content.  Taking the nod from Gary Vaynerchuk we are putting out a TON of short form videos from the events with each question and answer being the content.  Instead of having to sit through the entire thing we can go deeper on each question and share short form Q&A (usually a minute or so) which is better for everyone.

Starting with; How do you determine KPIs set milestones for your sales team?

Here is another one about how to develop a comp. plan for sellers

Here is the full playlist

As always this is an experiment and we hope to learn a lot from this strategy and feedback is most welcomed!

Big thanks to Dave Greenberger and Evan Bartlett for their help

 

Building The Sales Machine Event: Bryan Rutcofsky VP of Sales SMB – Yext

Our next Building the Sales Machine event is happening and this time I am happy to welcome Bryan Rutcofsky from Yext.

These events are open to anyone who is building the sales and revenue machine at a startup and wants to hear from others in their position, meet like minded people, and solve real problems.

Bryan has been working at Yext since the beginning and we are going to spend time talking about selling to SMBs and partners relevant to their business

BR

 

As with other events the format is;

1/3 Networking and coming up with questions for Bryan
1/3 Myself and Bryan talking about what has worked, tactics for the audience, and answering Q&A
1/3 Back to networking with others in the crowd and with our guest

Checkout our previous event with Steli Efti from Close.IO

Unlike other events, the purpose is to meet others who are experiencing your same challenges by inviting sales leaders and their teams.  If you are interested in a non traditional format focussed on getting you real takeaways and an interview focussed on tactics vs. backstory then please come out to our event.

Our goal is to make sure this is time well spent and you walk away from the time with real actionable insights and things to try.  Register today!

Huge thanks to my co-hosts David Greenberger and Evan Bartlett as well as to Foursquare for the space!

 

Eventbrite - Building the Sales Machine: Bryan Rutcofsky VP of Sales SMB - Yext