Hacking Fitness

So, you have created your first (or tenth) iPhone app and want to start selling it. Well according to Apple, all you have to do is upload it to the App Store and wait for the cash to start rolling in.

But wait, you just noticed the other 500,000 apps in the App Store!

Where is your app?

Why is no one downloading it?

Well, just like in all other aspects of business and marketing if no one knows where to find it, or they don’t even know it exists why do you think they are going to buy it?

Selling your app is all about exposure (marketing), but marketing does not have to mean dollars, if you use a bit of common sense and are willing to put in some effort you should be able to get your app noticed and convince a few people to download it. Don’t fool yourself though, if your app sucks people will figure it out and then all the marketing in the world will not earn you another dollar.

Provided below are some helpful pointers here to help get your app noticed, and hopefully turn that interest into sales.

The first step though is building the app correctly and that requires…


Focus

Focus, can’t say this enough. Keep the app focused to a specific function. Mobile computing, including the iPhone, is all about casual usage and impulse purchases. No one sits down to use the iPhone for two hours, or even 10 minutes. They bounce in and out of apps, games, texts, phone calls. One function at a time, easy, immediate access to the function is key, no searching through menus will be tolerated.

The mistake some developers make is in trying to differentiate their apps by adding extra features, hoping those extra features make their app more appealing to the end user. But remember how the iPhone is used, if your users have to search for a feature inside your application they will get frustrated and stop using it (the Settings app created by Apple is a perfect example of how not to develop something).

Hint: If you have 10 distinct functions in your app why not build 10 apps, which will create 10 times the exposure to your users, 10 times the chance they will buy one or more of the apps.


Buff don’t polish

Developers smarter than me have proposed the idea of putting just enough effort into an application to allow it to be useful without pissing their users off. I whole heartedly agree with this, especially given the other advice we provided earlier to the iPhone developer regarding focused functions.

Draw the line in the right place though, make the app professional and make sure it works. Nothing turns people off more than an app that crashes or loses data.

Hint: Be careful not to over polish; you do not need to be a perfectionist. As long as it does what you say it does you are good to go, get it into the market and see if anyone cares. If it is really popular then you can add polish.

That being said, make the app complete; help pages and about screens make the app look professional and provide extra information that lets your users know you are serious about maintaining the app. It also provides a location to advertise you, your development company and your other apps.

Make sure your graphics and icons are professional and clear, especially if this is a game or graphic application. Be inventive; many users make decisions simply by looking at the icon or the promotional images and screen shots in the app store. Make them flashy but also representative, no one likes to be misled. When users have choices (and the likelihood of yours being being the only app of its type in the app store is almost zero) they will go with the app that looks more professional, even if it is not as good.


Release Early; Update Often

The final piece of advice in the buff don’t polish vein deserves its own heading. You are releasing your app early to get feedback from your customers (exposure), use it. They are a fickle bunch and demand attention, give it to them.

If good ideas are suggested incorporate them and release an update. If there are bugs reported, fix them and release an update.

WARNING:
If the bug (or bugs) are a show stopper and you take too long to respond it could kill the app forever, it will drop in the ratings and it will never recover.

By updating often your users will develop loyalty that you can use when you release the next version or your next app.

Quick Note: Updates no longer take your app back to the top of the Release Date list, so you cannot use this as a way of getting more exposure, but you should respect your user base and make the appropriate changes.

So your app is ready now what?


Getting Your App Approved by Apple

Apple is fairly clear in their instructions about what they want you to do before you submit. They control the process, there is no use fighting the system. Do what they ask and make sure all of their criteria are met.

Here is the biggest one…no crashes.

There is zero tolerance for crashes and I am sure this does not need explanation.

That being said your app should also do what you say it does. The testers are not stupid and have seen lots of apps, if your app does not perform the function it is designed for, if there are buttons that are not connected, if there are links that do not work it will get rejected.

Another big one…read the Developer Program License Agreement (Linked Here) and make sure you are not violating anything in it. Apple is very clear; if you violate anything in the license agreement your app will be rejected.

Follow the Human Interface Guidelines (Linked Here). Apple is all about user experience, if you try to do anything that deviates from the expected usage of the iPhone they will reject your app. You are investing a lot of time in the development of your app, take the time and read the guidelines, make sure you follow them. If you are concerned ask Apple the question, they would rather tell you in advance than waste the testers time and reject your app.

Fill out the device list; as part of the app submission Apple asks you to identify the device list and the operating system versions that are compatible with your app. Make sure you fill this out properly and make it as inclusive as possible. You want to be exposed to as many devices as you can.

WARNING: Don’t stretch the truth, if your app isn’t tested on a platform assume it doesn’t work. Apple will test it and will reject your app if it fails on a platform you say you support.

Apple actually provides a FAQ detailing important tips to remember when submitting your app, read them (Linked Here). Remember even if it only take a few days to get your app approved, each time it gets rejected is a delay in getting into the market and results in lost revenue.

Here is a short summary of some of the other items that will get you rejected:

Keywords: Part of the submission process is providing keywords to assist in the search for your app. The keywords must be accurate and applicable. You can not use copyrighted or trademarked names from other games.

Sexual Content: ’nuff said, if you really want to go there you are treading on thin ice with Apple.

Easter eggs: Apple understands the appeal of hidden gems within your app, but they insist on the developer identifying them, if you do not and they stumble upon them they will reject the app.

Error Messages Make sure you tell the user exactly what is happening at all times, if something fails, tell the user, if the network is offline, tell the user, if there are any erroneous conditions, tell the user. This goes back to user experience, Apple does not want the user frustrated in the use of the “Apple” device.

Copyright Infringement: This is not just an approval issue but a legal obligation. Make sure you are not using copyrighted images or ideas. Make sure you are not using trademarked names. Even if it slips through Apples filter you do not want to be served with a cease and desist order. The easiest place to get caught out is images and sounds, if you are not sure where you got the image or the sound assume it is not yours to do with as you please. There are plenty of locations on the web (Creative Commons is a great one) where you can get free content, use these resources.

Linking to private frameworks The Apple API does not give you unlimited access to the internals of the iPhone or the iTouch. You may find yourself scratching your head wondering how to do something, and in some cases Apple may have decided that you just aren’t allowed to do it. There are plenty of “private frameworks”, libraries that provide access to the lower layers of the iPhone hardware. If Apple detects that you are using these they will likely reject the app.

If you are interested, there are web sites that provide a forum for venting about reasons, real or imagined, justified or unjust, that apps were rejected by Apple. Check them out, it never hurts to find more information (apprejections.com)


Free versus Paid Versions

One method that developers use to attract attention and to get people to try their app is a free but limited version. Traditionally this has worked extremely well, especially in the PC gaming world.

The theory goes like this…get your customers to try and enjoy the free version and they will like it and then pay for the full version. This still doesn’t solve the problem of how to attract the customers but it does remove the reluctance to try the app in the first place.

We will discuss the marketing of the app in the next section but I wanted to provide a few pros and cons of using free version before we started.

Pros
– Allows your customers to try the app and determine if they like it.
– You can advertise your paid version and other apps inside the app.
– You can upgrade them automatically with in-app purchases.
– If they like your app they will upgrade to the paid version.

Cons
– They may decide they don’t like it and not upgrade.
– You may put too much functionality in the free version and they don’t have to upgrade.
– Your customer didn’t have to pay for it, they may not even have tried it properly, but they are allowed to leave comments and ratings, and they may decide to trash your app in the ratings.
– You may actually reduce your paid sales.

The decision to do a free version may very well hinge on the cost of your paid app. One dollar (or $0.99) is not a huge barrier to entry and most people will just pay the dollar and try your app. In this case you are better off forgetting about the free app and just hoping for the casual sales. On the other hand if you intend to charge $5 or $10 for you app then you should seriously consider a free version, most people will not spend $5 on a whim and will want to get a sense of the capabilities of your app before paying.

Apple puts limits on what you can and can’t do in the free version. Basically it must look and act like a real app, no grayed out buttons, no obviously restricted functionality, no nag messages about upgrading. You can do the in-app purchase of the paid version but you can not do this with annoying pop-ups. Make it a nice experience and your customers will want to upgrade.


Where Do I List my app in the App Store?

I am not sure if you have ever looked but finding new or specific apps in iTunes is a brutal experience. The main sections on the front page are all controlled by Apple. Unless your app is on one of the top charts (and if you are you don’t need this article anyway) you will never show up on the front page. Navigating to the various categories is hard, so assume user will have to stumble across your app and act accordingly. They might find it in Search so make sure your key words are good.

List your app in the App Store category that makes sense. Apple will not let you list in an invalid category (i.e. putting a game in the GPS section) but they do let you move things around a bit. Try placing your game in a sub-category that has less items…Dice Games is always a good choice. There are fewer apps there and you might end up on the front page, the down side is that fewer people bother to look in that sub-category, so on average you will likely see just as many views regardless of were you are listed.

On the iPhone and iTouch App Store you will be visible on a front page for a bit longer. One page in each category is sorted by release date, so for at least a day you will be on the front page. Apple use to move your app back to the top of the list every time an update comes out, but they found they were flooded with updates, so they now only list the app on the top of the list the first time. this causes an interesting side effect, program options being used to create different apps. As of the writing of this article there are 20 version of Tic-Tac-Toe, each in a different colour or with different icons. Each one got to the top of the list the day it was released. Did this help sales of the app? Only the developer knows, but I assure you Apple will close that hole eventually as well.

Some people claim that you can “game” the system. Manipulate your app, your preferences, your keywords; change the price, make the app free one day, paid the next, run holiday specials; all in hopes of getting a different place on the App Store lists. I am not a big fan of this, go ahead and try it, doesn’t really hurt, but do your homework and try the various viral marketing ideas shown below, you will get much bigger return on your time investment.

OK, so your app is approved, now comes the hard part, how do you let people know about it?


Create a Web Presence

You are going to be telling people about your app (advertising) so you need a landing pad for them. The App Store is an obvious choice for this landing pad but it is embedded inside iTunes. It is good to have as many other locations for your customers to find your app as possible.

Create a web page to advertise your app. Depending on how prolific you are (how many apps not kids) you may decide to create a web site dedicated to all of your apps, your choice, but create a destination for your app, somewhere to send people when they ask about it, somewhere you can post information and notices.

Every little bit of extra exposure helps and it makes you look that much more professional. Submit the web site to be crawled by your favorite search engines, do not assume this will happen automatically.

Create a Facebook Page for your app, it doesn`t cost anything and provides a different location to advertise the app. Open all the privacy settings, you want everyone to know about it. Use this as a destination for all of you in-game status updates (see below), in addition to posting on your users Facebook pages.

Same goes with Twitter, if you are going to integrate Twitter updates into your app (for games especially) then create a page where people can go to see all of the information. Create a Twitter feed for all your apps, allow your users to post information there, helpful tips, upgrade requests, create a community around your app.

If you are creative, or know anyone creative, create a marketing video and post it on YouTube. Using iMovie and a simplescreen capture tool and the iPhone simulator you can easily create a video that highlights the features of your app and make it visible to everyone who wants to stumble across it.


Tell People

You have created the marketing presence and now you need to tell people about it. I am not going to talk about banner ads and other traditional marketing mechanisms. If you have a marketing budget that is definitely the way to go, you need to get your app in front of your potential customers, banner ads and google ad words is a fairly normal avenue. If you don`t have a budget then you need to be more creative.

Tell your social circles about the app, Facebook, Twitter, MySpace (does anyone use that anymore?). Send them links to the your web page, your web page, your twitter page. Encourage them to tell their social circles. Tweet about your app, invite people to become friends of your Facebook page. Don’t be afraid to post links to any reviews that are posted online, be proud of your app, tell your friends about the success.

WARNING: Don’t become annoying. Your social circle will be happy to heard about your app once. But if you spam them every day they will tune out


Get your App Reviewed

As much as you might be reluctant to submit to someone else’s review, comments and critisisms get your app submitted to specialty app review sites. Each one will require you to fill in a submission form talking about your app. Be aware it might not get reviewed so submit as many as you can. Even though the iPhone is geared towards casual usages and impulse downloads some users will always read the reviews to learn about new apps and new ideas.

Be happy with any review you do receive, read it, absorb it, take the comments and update your app if required. All publicity is good publicity. Each time the app is mentioned it will generate a few more hits and a few new downloads. If the app is good it will slowly become popular.

Every time you get reviewed Tweet about it, post to your Facebook status, let people know.

Here are some of the more populate review sites:

Touch Arcade (for games obviously)

The Portable Gamer

Slide To Play

148 Apps


Reaching Out from Within Your App

In keeping with the mantra that you need to keep telling people about your app and your happy users it is possible to automatically, from within your app, allow people to post to their own Facebook or Twitter pages and tell their social circle about your app. This is what eventually generates the exponential interest that makes the app highly successful.

Both Facebook and Twitter have APIs that allow you to embed this capability in your app. For example, I have posted high scores for various games to my Twitter page as well as posted a GPS description of my lunch time run. Maybe no one really cares where I ran at lunch but they know what app I used to track it and I am sure that generated a little bit extra interest in that app.

For a little bit of extra work in building the app you can add in the “Post to Facbook” button and allow your customers to reach out and do your advertising for you.

Facebook API
Twitter API

There are no guarantees that your app will be successful, especially if you are doing this as a hobby but with a little bit of extra effort you can make sure at least some people know about it and maybe put a few dollars in your pocket.

Share Share on Twitter Share on Facebook

Thanks to @janasedivy for pointing me to this article that perfectly captures my frustration at the response to in-house innovation that I have encountered over and over again in my career in high-tech.

INNOVATE ON PURPOSE Why do we want innovations yet fear innovation?

There was one quote that stuck with me “…we have met the enemy of innovation and he is us…

Ask yourself how many times you have been asked this question…

XZY Company just released a new product that is kicking our ass, we need sometime new, what can you build for us?” which always seems to follow the meeting where you demonstrated something new, or suggested, for the 100th time, that the product should be upgraded, overhauled, or thrown out, only to be met with the response “Why would we spend time/effort/money on that, the product is selling just fine“.

Or the old standard…”I met these guys at a party/at lunch/from a cold call, they have some really cool technology, we should get a partnership going“…seriously??? Why do you have an internal development team? Are you letting them innovate? Have you asked them to innovate? Have you forced them to innovate? While bringing in external partners can be good, if it is complementary and not overlapping, it is the best way to stifle innovation inside your company as your internal team sees that their contributions are not valued and they are not being given a chance to produce exciting new tech.

Product creation is not magic, innovation is not free. Every product that appears and takes your breath away is a result of months and months and years of trial and error and customer feedback and re-work. It only looks like magic because you don’t hear about it until it was done and launched. Someone…someone else…was spending the time and effort to innovate in a market where you and your company are just sitting, hoping desperately that the customer will be happy with the current/next version and allow you to make your numbers for the next quarter.

Innovation is very disruptive, disruptive to the products already in the market. And don’t fool yourself, there will be disruptive innovation in your market if it is successful in any way. They will come for you and your healthy sales margins. I know because when I am looking at new products I look for markets where there are established products and complacent companies and room to innovate.

Ask yourself, how did you get where you are today? How did the current product get build and launched? If you are in a small or medium size company, in all likelihood it was developed by a group that is no longer with the company. A group that innovated because they had to, because they had no product to sell, because they were selling into an existing market, against a larger competitor and had to innovate in order to make any sales at all.

The problem is that success can be ultimately self-defeating. Your company can become complacent and addicted to it’s sales. Now don’t get me wrong, sales are a good thing, and sales, obviously, are necessary but they can kill innovations. They can make you afraid to innovate, afraid to rock the boat and potentially upset your customers by getting the next version wrong. Sales will make you chase features and turn your product into a ball of duct tape, instead of creating the next great thing.

Don’t fool yourself though, those same customers that you are so carefully protecting from your internal innovation are looking at each new product that comes across their desk and will jump on the one that thrills them, dropping you like a hot potato.

Ok, enough whining…what is the solution?

I took a course in startups a long time ago and the one comment that stuck with me was “If you have a successful product, sell it and start again“. Which is a radical way of looking at it but it goes to the point. If you are good at innovating new products, do it again, and again.

Now maybe this stuck with me because I agreed with it, but the core of the comment leads back to where we started. Don’t become complacent, don’t become addicted to your sales, don’t believe your own sales bullshit, don’t believe you are the best. There will always be a better product, a disruptive innovation, why no let it be one of your own.

Things to try…

1. Challenge your internal resources to innovate, and not just in development. Find better ways to sell, better ways to market your products, better ways to support your customers and make them happy. Challenge your teams…stop asking them why and ask them why not!

2, Give them time to experiment. Even a day a month, dedicated just to letting the internal resources do whatever they want, to try new ideas.

3. Give them a forum to show their ideas. Celebrate the innovations, even the bad ones, it shows that people are engaged and interested and it will lead to other ideas and other innovations.

4. Take a chance on the ideas. If there are good ideas that come out of the demonstrations act on them, integrate them into your product, start new product lines, go after new markets.

Innovating from within is a scary concept and claims resources, time and money, that do not always provide immediate return, but you will find that long term the result is a company that is successful and more importantly…is still alive.

epub_logo_color-219x300

It is hard to tell if this article on ePub3 could be any more wrong

The publishing industry has a problem, and EPUB is not the solution
http://toc.oreilly.com/2013/02/the-publishing-industry-has-a-problem-and-epub-is-not-the-solution.html

The author, a smart guy I assume, seems to believe that technology and more accurately, the right technology, and even more specifically DRM free, zero cost, open source books, will solve the publishers problems when it comes to eBooks and ePublishing. This is a technology guy, assuming that technology will solve a problem that has nothing to do with lack of technology.

To prove his point he makes a couple of wilding inaccurate assumptions.

First, he spends a lot of time confusing ePub (ebook publishing standard), DRM (ebook protection technology) and eReaders (display applications for ebooks) mixing them together as if they were somehow selectable features of the same basic technology pre-requisite for the ebook market. Then he jumps wildly to the assumption that if we just used HTML5 (like the web) and made all books free (like the web) that would solve everything.

I am not sure where to start disagreeing.

OK, so let me agree about one thing, the ePub standard, in and off itself, is not a solution to anything, and is wildly deficient both in specification and in implementation. The publishers have a much bigger problem, however, than which file format to use to display ebooks. They don’t even understand how to adapt to this new ebook market.

It starts with the publishers basic approach selling books. The reality is, publishers want to preserve the existing book-to-book-buyer interaction. That model works and they are making good margin on sales. Paper based books are sold at a store front, where an actual exchange of money occurs and a consumable product is provided (book). Publishers are confused by how to make money in the ebook market as there is “nothing” being sold and they are concerned (rightly so) that the “nothing” will escape into the wild and be copied forever and they will lose future ability to monetize that “nothing”.

Which brings us to the the DRM issue, let’s put that to bed right away. DRM has nothing to do with ePub or the ePub standard. DRM is a technology layered onto the ePub after it is created. The publishers are the ones mandating the DRM restrictions on ereaders. DRM has been proven in other markets (songs, movies) to be a restraining technology not enabling. Apple turned off DRM in itunes for songs and they started selling MORE songs, not less. The publishers are at least 5 years behind the curve on this one.

As far as the ebook standard is concerned ePub3 is brutally outdated. It is incomprehensible that they wouldn’t simply mandate the use of HTML5. All that is required is come up with a simple wrapper structure for multi-file HTML5 content and allow offline viewing, problem solved (seriously it is that simple). The browser technology already exists to render HTML5 content is literally all  mobile platforms. But HTML5 is not the solution, in the same way that ePub is not the solution, it is simply a technology.

What is actually needed is to create an open eBook market place, one that authors can access and want to use, various technologies will fill the gaps and make it work.

As far as the concept of making books free is concerned this is absolute nonsense. Every author or publisher wants to get paid for their work, “the web” and HTML5 is not a solution for this. The public has been trained that they can get content for free, but we also know that same public will pay for content they feel is worthy and some things are worth paying for.

Authors need to realize that just because they spent the last year writing a book doesn’t mean anyone want to read it (or pay for it). The same authors that had rejected manuscripts sitting in their home office two years ago are now able to self-publish and become indignant when someone suggests that $14.99 might be a bit steep of a price to pay for that same rejected book.

Authors, if publishers aren’t going to do it for you then you need to earn your own pay check…you need to build audience and build demand for your writing, then you can start to make money on your work. Publishers have traditionally acted as the gate keeper for this, once you got past them you likely made money, now everyone is a (self) published author and there are no gate keepers but this doesn’t mean there is somehow a lot more pay-worthy work.

To succeed authors (and publishers) need to embrace the concept that some content can be given away for free and then they need to learn when and how to move from free to paid. Newspapers and magazines are struggling with pay-walls now, with huge backlash, and they have experience putting content on the web for years, how are print authors and publishers expected to cope, this is an environment in which they have no experience. Publishers need to treat authors like partners and not milking cows that are just there to be exploited.

Publishers need to wake up and realize that they are losing their power. The web and ereader (hardware and software) combined with easy to use and free to access self-publishing tools is making them irrelevant, the consumer will decide what is good and what isn’t, they don’t need publishers to tell them.

Authors control the written word (content) and the channel partners (Amazon, Google, Chapter etc) control the ereader (customers), what is left for the publisher?

OK not really..and given that I have been involved with more than 20 start ups in my time I am kicking myself just as hard as the next guy who dreams of bootstrapping his (or her) self to technology stardom.

Truth be told startups drive innovation in high-tech. Progress would be slower if garage entrepreneurs, home coders, open source proponents and other “not-for-profit” developers were not so incredibly active in the high-tech industry.

I stumbled across this essay by Paul Graham (local pdf copy here) that had me laughing and crying and nodding my head in self-deprecating acknowledgement all at the same time. It feels like I have a story (or three) for ever point that he makes. Given that I get asked about once a week whether I think an idea is worthy of investigation and/or eventually turning into a startup I thought I would add my two cents to Paul’s essay.

Now don’t get me wrong, I have never taken a startup all the way to a billion (or even million) dollar takeout by a larger company. The most successful I have been is running (with a partner) a small consulting company for 5 years that kept 6 techies gainfully employed. I have started, either alone or with other people 4 companies. I have been involved at the early stages of at least 20 others, a few of which became viable corporate entities, most of which ended after a few conversations at the same coffee table in the same coffee shop where they started.

I know I have become jaded by failure and burnt out by the endless hours and “wasted” effort but I know that each new idea creates an enthusiastic and optimistic rush of excitement and desire to jump right into it. I like to think I am maturing as an engineer and becoming more deliberate in my assessment of each new idea.

I have probably invested $150K…real cash dollars…in various initiatives, I don’t even want to think about the total value (cost!) of salary I have deferred in return for shares or options in various start ups.

I have spent countless hours trying to convince investors to put money in to various ventures and even more time trying to come up with rational arguments to use to convince said investors to part with their hard earned money.

I have spent innumerable other hours trying to convince normally intelligent engineers and programmers to throw logic and their better judgement to the wind  to come work for the startup of the week for considerably less than they are worth on the open market.

Both types of conversations always leave me feeling a bit dirty and this leads me to my first point about startups…

1. Get down on your knees and thank anyone who is kind enough to give you money, time, advice, equipment or even free coffee and bagels for your startup. Given that 9 out of 10 venture funded startups eventually fail, 99 out of 100 self funded startups fail and probably 999 out of 1000 startup ideas die on the vine, anyone who gives you anything is making the equivalent of a charitable donation without the benefit of a tax receipt.

The easiest way to fund a start up is to do it yourself. If you are lucky enough to have an existing venture that you can use to kick it off or you get a nice severance from another company or your domestic partner is filthy rich or you have a nice nest egg stashed away and are willing to roll the dice with it…off you go. But remember the failure rate for startups, remember that the money you spend is far safer buried in the backyard or hidden under your mattress until you regain your sanity.

This brings me to my second point…

2. You had better have an incredibly understanding domestic partner. They are watching you burn, not only cash but time, potential salary, hard earned saving and southern vacation opportunities. Think about the strain on your domestic relationship that not working will cause. Most of us can afford to miss a paycheck or two…can you afford to miss 10, 20, 100? Not only are you not getting a salary but you are likely spending money as well, a little bit here, a little bit there. This type of behavior is not something that most partners are comfortable dealing with, not for long anyway.

It is no coincidence that most of the people you meet in startups, the ones you see in the Google and Microsoft ads are young and single, they are the people that start ups hire. These people will work 100 hour weeks on the chance the startup will be successful. These people will take less salary because they have less to lose than the 35 year old with two kids and a mortgage.

Third point…

3. It takes a long time to get the revenue rolling in. It takes even longer before you are in a position to pay yourself. And you can always convince yourself that the first real revenue is just around the corner and that your first real paycheck is following soon after. But it rarely is, it is always much, much farther away that you think. And your investors and other companies you have to deal with know you are small and desperate and will take advantage of that fact to get you to do more work and wait longer for cash than normal companies. If you are one of the main founders you are likely to get paid last and be the first to be asked to defer salary (if you are even getting one). You and your founding partners had better be aligned on this, nothing creates tension in a startup faster than differing needs and attitudes about money.

Fourth point…

4. Pick your startup partners well. Nothing creates tension in your startup faster than differing attitudes…about anything. Remember you will be working close beside this person 8, 10, 12 hours each day, weekends, nights, traveling together, probably sharing hotel rooms (depending on your finances), you had better be aligned. Ask yourself, do I have the same goals, the same needs, the same work ethic as my business partner?

Ask yourself, do I need a partner?

I remember telling an associate in a startup (two in fact) that someone had to be king. Someone has to make the decisions and someone has to be responsible for the ultimate success or failure  of the venture. By all mean surround yourself with good people, ask their advice, actually take their advice but make a decision and stick with it. My feeling is that it is better to strike off in the wrong direction for a while, see where you end up, see what you discover than to sit, mired in indecision while your employees begin to question your leadership ability.

One of the great engineering tenets is that you learn more from failure than from success….and I would add…as long as you eventually succeed 😉


Here is my Top Ten list, for people starting companies.

Top Ten List – Things to Think About When Starting a Startup

1. Make sure you can live without a paycheck for at least a year…seriously 12 months…no income..trust me you will need the runway.

2. Pick you business partners well…you will be married to these people, you will see them more than your domestic partner and family…you better trust them with your new venture.

3. Figure out your idea…tell people about it…patent it if possible..but tell people…accept their input, their critisism…be rational…if this idea doesn’t work there will always be another. My patent lawyer (who is also an angel investor) told me that he will refuse to talk to you if you feel you can’t talk publicly about your idea. If your idea is so simple that telling him about it will put the entire venture into jeopardy then it probably isn’t that good or unique an idea. Tell people, judge their reactions, practice your pitch, you will need that pitch to raise awareness and raise money…you better be ready with the money shot when you get your 30 seconds in the elevator with Bill Gates.

4. Surround yourself with smart people, hire them, put them on an advisory board, have lunch with them, get drunk with them…know you are not going to do this on your own…there is just too much to think about.

5. Find an office where you can be together as a team. Everyone wants to start a company in their basement or in two or three basements, communicating using email and MSN but there is nothing to replace the interaction that comes from being face to face, talking in front of a white board over stale pizza. That is where the magic happens. You will be asked to consider off-shoring especially if you are taking any investment from VCs. Resist the urge…if you can’t sit beside your guys and help them solve issues you are asking for problems, you have lost control, it is not your baby anymore. Outsourcing will come, once you are bigger and successful…when you are little you need to be close to your idea, to nurture your idea and make it grow.

6. Treat your people well. There is no conversation I hate more than the “let see if we can sweat the guys” conversation I always have with founders. These people are making your dream happen, share the dream and it is not always about money, be creative and get them involved.

7. Options are worthless, do not try to use them as incentive programs. Unless you are a well funded, rapidly expanding company with actual sales in a growth market (biotech perhaps?) the probability that the options in your company will ever be worth anything are almost zero. Your employees know that and will laugh at the offer. If they don’t understand  the options are worthless then shame on you for making the offer.

8. Get your idea into the market…polish it only as much as necessary to make your customers want it. If it is a good idea it will take off, if it is a bad idea the polish will not fool them for long. Let the market decide if the idea is good and do it before you run out of money. If you give yourself a year it is always better to find out after three months whether the idea was good or not…give you time to adjust, to refine or to stop…if you polish the apple for the entire 12 months you only get one shot.

9. Market your idea. Too many technical people create something and then expect the world to come calling. If no one knows about your new gadget how will they know they need it. Why would you spend $1m building something and then spend $10K trying to tell people about it. Gaming companies sometimes spend more on marketing than on development. Marketing can make a bad idea successful, not marketing will never make a good idea successful. I am not suggesting you throw money away frivolously, but understand this thing is not going to sell itself. Hire a sales guy, hire a marketing gal, tell your friends, ask them to tell their friends, do a late night TV infomercial but get the word out. Be creative, you need to rise above the crowd, stand out from the herd.

10. Have fun. That what this is about people, a startup is not a job it is a calling. You are doing it to create something special…enjoy the ride.

(reposted on Associated Content)

I do not envy the plight of the book publishers in the new world of ebooks.

The ProblemNew Technology is Changing the Market

Book publishers are being pulled in all directions as they struggle to come to grips with the new reality of publishing electronic books for tablets, smart phones and ereaders.

The Current Situation – Stagnation

Publishers are, for the most part, taking a wait and see attitude. They are waiting for the market to show them where the sales will be so they can decide in which direction to move

My Recommendation – Get out ahead and lead the market

Instead of letting technology startups and self-publishers drive the market, get out ahead, drive technology adoption, try new directions, set trends, take chances, be a market maker instead of a follower. It is not always easy to adapt once the new market is set.

Consider…

  • eBook sales surpassed hard cover sales in North America for the first time ever last summer (link here), so the push is to produce ebooks
  • demand from the consumer for ebooks is increasing
  • eBooks are currently selling for about half the price of a comparable hard cover
  • profit margins are lower on ebooks than on hardcover or paperback books (link here), so there is no incentive to produce ebooks
  • publishers are starting to merge to stay competitive, increasing their back catalogue of books while reducing the staff and overhead required to produce them (link here)
  • by staying with print the publishers will ride their nice profit margins right down to zero revenue

Print book publishers have is easy compared to text book and children’s (illustrated) book publishers.

Even as publishers struggle to keep the price of ebooks high they are being attacked from the side by developers who want to turn children’s books into interactive apps and reduce “book” prices even further (for example an iBooks version of a children’s book will sell for $6 where the app version of the same book might sell for $2).

Illustrated book publishers are playing with two scenarios, neither of which seems very palatable…

1. Create an interactive version of the book for iPad or other tablet, spend $30K on developing the app, sell it for $1.99, spend an additional 30% on marketing ($40K total), sell 30K copies (which is considered successful in todays market), make revenues of $30K and loss money on the venture.

2. Create a flat digital copy of the book, spend $2K on creation, sell it for $5, don’t market it at all, sell 1000 copies and break even on the venture.

Publishers are doing better volume on the apps but they are still at risk to lose money. The lure, however, remains, the possibility of being successful and having a break away success, but this is a false hope.

The volumes on apps are higher because they are cheaper and more interactive. They are a better product and more compelling for parents as they offer more to the child, as long as they don’t look like games (good lord don’t make it look like a game).

This is really just economics 101…

LOWER PRICE = HIGHER VOLUME

And hopefully the volume increase is higher than the price drop so your total revenue increases, as long as your production costs stay the same, but in the case of  ebooks and apps this is not the reality.

The price of higher sales in the interactive book market is higher production costs with no guarantee that the sales will follow leading to the current situation where a very low number of books are being converted into digital form (and they are usually the guaranteed successful ones like Dr. Seuss) and a market that is crying out for more interactive books.

Enter ePub3…

epub3_image (1)

The new ebook standard, which is partially supported by most ereaders (with full support promised soon), is capable of displaying interactive books (textbooks, cookbooks, children’s books etc) inside traditional ereaders without the need resort to creating an app. The only problem with ePub3 (other than partial support) is that there are few or no tools to author books (Apple has created iBooks Author, which supports a subset of ePub3 functionality for creating textbooks, but can only display inside iBooks).

Here is a ePub3 children’s book that I created that shows the power of ePub3 (demo book). Download it and open in iBooks and you will see a fully interactive children’s book, created using Skyreader’s Studio ebook authoring tool (creating ebooks at a cost least than 20% of traditional interactive apps).

If publishers want to make the ebook market successful ePub3 is where they should focus their time, effort and promotional expenses.

They should be market makers, not market followers.

Guy Kawasaki has some interesting advice for publishers to help them move forward in the era of dis-intermediation, self-publishing and electronics books…read it here (10 Strategies for Publishers to Succeed and Survive)

My concern with this advice is that it is the same advice that has been echoed to them for years.

I believe that publishers need to make a fundamental shift in the way they do business in order to survive, it is not about small steps it is only through a drastic a right hand turn, innovation and leadership that publishers will survive the digital era.

There are two basic industry trends that need to be embraced before the publishers can move forward.

 

1. Electronic books are a rapidly growing market segment and people expect to pay less for e-books than paper books…

– I have had this conversation with publishers and authors alike. They are unhappy with the dropping prices of ebooks as they want to maintain their profit margins and, in the case of the authors, be paid for their effort. The problem with this stance is that people don’t believe ebooks should cost as much as they believe there is little or no cost associated with them.

– The reality is that a publisher is going to make less from the ebook on a per unit basis than from a print book, which is a dis-incentive for the publisher to make any moves. Given that manufacturing and distribution costs for a paperback book is in the $2 range the publishers will make $10 on a $25 book after they pay Amazon their 50% and deduct the book costs. On a $10 ebook they only make $7, so why move to ebooks at all?

– The incentive to action should come from the reduced demand for print books and the reduced volumes and thus reduced sales the publisher are seeing. But they are protecting their profit margins and in doing so they are slowly spiralling into lower and lower revenues. This is a death spiral.

– The way out is basic economics 101, reduced price should generate increased sales. Like any market you drive top line revenue by increasing sales even if it means reducing price to do so. People are not happy to pay $10 for an ebook, even if the paperback is $20, and with the price of apps hovering in the $2 range they questions why a book should be any different.

 

2. Self-Publishing is here to stay

– Every ereader vendor has a self publishing channel available to aspiring authors. The ereader vendors goal is to get as many books into the reader as possible. As an author I can try to convince a publisher to take my book to market for me, with a very high rejection rate and then a very low return (10% or 15%), or I can simply take it to market myself and keep 70%. Now…obviously marketing and promotion are my problem now, but my book will be in the market and will be selling copies. Once the book has sold a few copies it might be easier to get the attention of a publisher and get the book promoted.

– Publishers need to figure out how to work with the self-publishing market. It is not going to be as simple as tracking the best selling self-published books and approaching them, because by the time the books are successful the authors will have much less need of the publisher. It is not a matter of turning up their nose and assuming the market will go away. People want to create, people want to write books and the cost of writing and publishing an ebook, real out of pocket costs is rapidly approaching $0, so it will only get bigger.

– The solution here is for the publisher to actually use their contacts and marketing and promotion expertise to promote self published books. Provide it as a service, leverage the work that is already being done for internal books and let the self-publishers pay for it.

 

This highlights the concern I have with the freemium business model that is so popular with online service providers and app vendors. Some of them do it right and some do it so very wrong. The trouble is finding the right mix of features that allows people using your product to have a good experience and stay with your product, but also provide a set of upgraded features that convert a reasonable percentage of your customers into paying customers.

Get the mix wrong and a number for things can happen:

1. Your “free” product is too feature rich

  • result, customers stick with the free version as there is no need to upgrade
  • a very low percentage of customers upgrade
  • this is OK if you have a fall back revenue extraction model (i.e. ad-driven features)

2. Your “free” version is not fully functional

  • result, product is not usable unless upgrade is performed
  • customers become disgruntled with the product, stop using it, give it bad reviews
  • a lower percentage than desired will upgrade

3. Your upgraded features are too expensive

  • result, customers will stick with the free version
  • or not (see #1, and #2 above)
  • a very low percentage will upgrade

4. There are lots of other ways to fail…try to avoid them.

  • Above all, treat your customers like you would want to be treated yourself.

The magic, always, is finding the right mix of free and pay services. Don’t be afraid to experiment, change pricing, move features from free to pay and see what happens, get customer feedback.

The primary objective is to make the product usable in the free model, never hold your customer for ransom, never make them feel trapped.

The web site that is hosting this site (wordpress.com) does a really good job of using the freemium model. The site is incredibly functional in the free model but has a good set of features that you can pay for to provide enhanced service.

Dilbert Comic Strip, Dilbert ©2012, Universal Uclick

Technorati Claim Code : 3DKF52C2KKK3

%d bloggers like this: