the goose

@jdrumgoole did a great job of detailing the goings on at the #igap marketing conference in Dubiln.  It is at times like this I wash I was back there myself.  I’m posting Joe’s tweets here for posterity.

If we can just get 1% of our visitors to convert  …

Never have more dangerous words been written in a business plan.  It sounds plausible only because humans are mind-boggelingly bad at understanding percentages.  Even if you were a complete wingnut in school you probably still managed to get 10% in the honours math exam.  A 5% discount is nothing.  A doctor telling you that you have a 1% chance of not waking up after an op is hardly worth losing any sleep over.

However, I don’t see a lot of discussion on the chances of a 0% conversion rate in your business. Read the rest of this entry »

Ever had awful service in a restaurant?  Been overcharged at the till in a Supermarket?  Had your phone company rip you off while you were roaming on Holiday?

Infuriating, isn’t it.  You do at least have the pleasure of taking your business somewhere else however.  The same cannot be said for your government.

Like it lump it, no matter how uncleanly the hospitals or how backward the public transport, you pretty much just have to grin and bear it.  Or do you? Read the rest of this entry »

Partnerships and deals are what it is all about.  Few are talented enough to do it all by themselves and seeking out and working with good people seems to be key to success – unfortunately.  I say unfortunatly because working with other people is where much of the risk lies.  This week Mike Arrington fell out very publically with his CrunchPad partners and it got me to thinking that I should try and flesh out my own thoughts on what makes a good deal.

I’m okay, your okay: I’ve gotta feel like there is mutual respect in any partnership I enter.  I may laugh at my partners over the top sales patter and he may guffaw at my badly spelled emails, but underneath there has to be some kind of mutual respect.

Aligned Goals: Make sure that the outcomes are aligned.  Not everyone wants the same thing out of the same project but I try to make sure those goals are in harmony.  You most commonly see this when an entrepreneur engages a development team to build a website for him.  The development team (is rightly) focused on billing hours and building reputation.  That is not exactly the same as being focused on a successful product launch.  I have met many would-be web-entrepreneurs who have fallen fowl of this mistake.  While I used to think that products could be pushed out in a month or so I’m now starting to come around to the idea that these projects need a technical resource fully invested for the duration of the product life-cycle.

Beware of secondary-gains: A little while ago I agreed to build a website for a partner of mine.  The website was for his own business but the idea was that he could use that site to promote a product we were both working on.  Looking back, this may have been a mistake on my behalf.  Whether or not the project succeeded or failed, he had his new website.  We weren’t invested in the same way and perhaps that meant we weren’t both committed to making the project a success.

Go with your gut: By far the easiest way to avoid trouble in a deal is to go with your gut.  Your gut isn’t PC, smart or even right all the time, but sometimes that icky feeling might not just be a dodgy curry but your collective sub-consciousnesses sending you a real warning.  If I had one rule of thumb to follow, this would be it.  No matter how much your conscience brain wants something to work – your gut knows better.

There are a lot of users out there.  There are also a lot of great people who might just be working at slightly cross purposes to your own.  I’d like to think that pretty much no-one is set on screwing you over – it can just happen that way sometimes.  Of course – its up to no one but yourself to make sure that doesn’t happen.

What do you think makes for a good dea?

1. Find out what people want: Replies on their mobile
2. Go and get it: TBD
3. Give it to them: TBD

It looks like I’ve found out what people want from Agtweet.  I sent out a survey a couple of days ago and I got a surprising 112 replies.  I was surprised, not only because 112 was getting on for 20% of agtweets followers, but also because of the content.  First up – perhaps not suprisingly given that Meteor customers make up almost half of AgTweets subscribers despite only a quarter of them having an ‘085′ number. 

About 80% wanted to be able to have @replies sent to their phone by text.  This is something twitter themselves are no longer offering.  The reason?  Well, sending text messages in Europe costs money.  Footing the bill for the millions of replies that are sent every day would be unsustainable.  Hence, maybe there is an opportunity here.  About 20% of respondants want to be able to receive replies and would be willing to pay ‘a small fee’ for the privilege.  I used the term small fee in the survey rather than a specific amount, because what a small if is, is pretty subjective.  Among the Meteor customers, this figure actually rose to 30% willing to pay something for the privilege of replies.

So here we are.  20% don’t need replies, 80% want them but only a third of those are willing to pay.  I asked a final question which was ‘how could agtweet pay for itself?’  My favourite answer was “GET A JOB”.  They obviously haven’t read my blog (or my last jobs performance appraisal for that matter).  People took a lot of time in their answers.  There was no shining moment of revelation reading through these but there were some good ideas.  In brief they were:

1. Get sponsorship (operator, government)
2. Charge a 10c fee per message sent
3. Allow people to buy bundles of text
4. Pay a small monthly subscription

Sponsorship is something I already looked into via approaching advertising agencies and it takes a bit of lobbying.  It also doesn’t really fit with my get hundreds of people paying tens of euro a month objective.

I do like the idea of charging a small fee per text received but the premium rate messaging regime in Ireland doesn’t really allow it.  The smallest premium rate fee available is 30c of which you can expect to get about 8c in revenue inclusive of VAT.  I did look at trying to make this work but it didn’t really stack up.

Buying bundles of texts is the approach taken by http://www.twitsms.co.uk.  They’re rates are pretty low with 4c a message.  It is run by an Australian couple who are makinga play on a worldwide basis.  I know from experience that making a margin on a text message is not an easy game.  Scaling issues abound along with customer support issues.

Finally, the ’small monthly’ subscription came up as a suggestion.  I like this best because it fits with building up a predictable cash flow.  The only trick would be geting the price point right.

While all of this surveying was going on, I’ve had 12 people trialling the reply service.  This has produced some useful usage information.

The graph to the right shows how many replies each of the testers have been receiving.  The figures are taken after 11 days of the trial.

I’m not sure if 12 people is a large enough sample but something about this graph jumped out at me.  About 30% of the users were getting a lot more usage than the other 70% – which somewhat aligns with the willingness to pay in the survey I ran.

In summary:

20% don’t want @replies at all on their phone

80% do – but only 30% of them would be willing to pay.  So – the question I have to ask here is – is it gonna be worthwhile trying to charge anyone at all?  What would be considered a ’small fee’?  Ideally I’d like to come up with a solution that kept everyone happy.  In other words, a free or small fee for replies for the light users and a slightly higher fee for the heavy users.

I saw this tweet from @kevin_noonan this morning and it hit a nerve.

So how would this apply to building ‘lifestyle design’ (if anyone has a better description for this, I’m wide open to suggestions).

The Rules of the Game: In my case, this is that I want to have hundreds of people paying me tens of euro a month until I earn more than I spend without selling my time.  Other games you can play include, earn 4x the national minimum wage and invest 20% of income for 15 years until financially free or find a job you love and do it until you die. The good news is that there are new games you can play all the time – or even come up with your own.

Set the Stakes: To me this means, what am I willing to spend in terms of capital. I don’t necessarily mean financial capital.  This could mean the amount of time I’m willing to invest or the amount of effort I’m happy to spend.

Quitting time: How do you know its working?  For me this is all about measuring progress.  Setting a clear, well set goal and breaking it down to weekly or monthly objectives.

Carry on.

Index style websites are the proven model for generating solid cash-flows online.  Daft, MyHome, RevaHealth, Maybefriends.com and Google have all proven the model.  Collect together a searchable collection of homes/people/clinic or chics and you can make money from it.  Estate agents, dentists and horny teenagers have doling out to get included in these services for years.

It makes sense. These sites help you get paid/laid.  Well worth a few bucks.

But what next?  I’ve spent the evening playing around with the excellent Spotify.  For me, this excellent little app really marks the true demise of the traditional music industry as it was known.  I’ve been enjoying all the music I can eat for FREE. It makes sense.  The cost of producing and marketing music is dwarfed by the potential for sales.  The music industry used to have a free ride – recording once and reproducing the material under copyright n times.  What has happened is that market forces have caught up.  Bands now make money from live events and merchandise.  They are back to selling time – albeit very very well paid for time. Read the rest of this entry »

I’ve only taken 8 weeks worth of Spanish lessons while in my life.  At that is was mostly because the teacher was hot and my pubescent mind hadn’t figured out that hot 30something spanish teachers are never gonna fall in love with a pimply teenagers.  It’s kind of ironic that Benos Entonces offered a bunch of expats a free ride on their series of
Spanish learning videos in return for a review.  I say ironic because they have cunningly figured out that the horny teenager in us all never really goes away and using sex to distract you from the fact you are learning a language is a winning strategy.

The series comes in a variety of formats but I went through the lessons on my ipod.  This was pretty easy to do – I just dragged them into my itunes and low and behold 30 odd innuendo filled episodes were ready to roll.  I had in my mind that I’d zip through them over a spare weekend but as it turns out they are fairly hard work.  Thankfully, the protagonists, an English bloke and his hot Argentine professor manage to keep your interest with a selection of vaguely titillating topics while still covering the basics.  You could in fact be excused for thinking it was a primer on how to deploy pigeon-Spanish chat up lines to the fine art of getting you leg over.

Each video consists of a ‘magic white board’ which offer a kind of subtitling system on steroids.  The teach, Jimena, speaks only in Spanish and her words are displayed on screen with English subtitles underneath.  I really don’t have much Spanish at all and from the get go it was tricky to keep up.

Between the ‘magic whiteboard’ and the questions asked in English by the English bloke I managed to figure most of it out.  Having said that, it takes a while to get used to reading the Spanish and listening at the same time.  It’s bloody tricky to read the Spanish and English and still pay attention to what is going on at the same time.

I guess this is how the Argentines speak in the wild so it is probably no harm to just push yourself and try to keep up with the lessons.  By the time you get to lesson 9 or so you can pretty much get everything that is being said.  The magic whiteboard also colour codes the text so that you can easily see which are verbs, nounes etc.  Again, you don’t really get the hang of this at the start but eventually it becomes kind of handy.

I would certainly recommend the series to anyone seeking to improve their aural understanding of Spanish while covering basic concepts.  It is a lot less boring than a text book, probably more fun than your own interactions with a Spanish tutor and at the very least you’ll brush up on your pickup techniques.

I really like the Bizcamp concept. I have met some great people through it and the grass roots feel makes the advice proffered that much more believable.  On the other hand, I think the presentations can be even better.  Specifically, and selfishly, I’d like to see less …

• talk about funding / support ‘grants’:  Most businesses are not suitable for funding.  Biznik send me an email recently claiming than less that 1/1oth of a percent of their surveyed businesses had venture funding.  The funding industry loves these type of events but it can be overdone.  While funding is great for some it is a worrying distraction for most at a time when really it should be all about sales.
• ‘professionals’ pimping pro services: I’m all for selling but I’d actually rather get my accountancy advice from another entrepreneur (eugh – I hate that word) than someone who makes their way in the world be selling hours.

and more …

• The nuts and bolts of business: Rather than a panel discussion on how to raise money – lets have a panel discussison of entrepeneurs on the nuts and bolts of business (sales, accountancy solutions, dealings with the reveneu etc).  Already successful business people how have managed to crack some of the boring every day business or making a buck.
• Guerilla tactics: Personally  – I’m not so interested in what I should do to build a successful business.  I’m more interested in what I can do. I want to hear case studies and examples of how people managed to get the most out of the system or pull off a sales coup by using a little inginuity.  There should be a type of parliamentary privilege applied so that people don’t need to watch their P’s and Q’s too much.
• Debates: Debates are great for pulling out little gems of advice.  How about funding vs bootstrapping or building a business vs building a lifestyle.

Of course – I can’t be there for this years event but if I can’t spout supposed advice from a stage I can at least do it from here.

Pop down to your local Spar.  Look at the wine on offer.  The majority of it is betwee €8 and €12.  There might be one or two for €5 and a couple for €16, but the majority lies somewhere in the middle range.  Have you ever wondered how wine which has come from so far and near, from France to South Africa to Australia, should all settle down to this narrow band?  I have.  I blows my mind that even though the South African Pinotage had to be shipped from another hemisphere it still costs roughly the same as the French Cab Sav.  Is it a massive co-incidence?  

No.  The reason is – the customer gets to chose what price to pay.  Its true for wines and it is true for web-apps and websites.  The value of one wine over another is purely subjective and it is up to whoever has the moula in their pocket at the time to decide how much of it is worth handing over.  As merchants, we don’t really have any control over that.  All we have control over is the amount of value we chose to offer.  So when it comes to pricing, here are the things I always try to implement.

1. 9 buck starting price: Offer a few bucks for something basic.  For consumers this should be around the €9 /month range.  It is a table wine for every day consumption.  For business’s that should be more like €25 a month.  No matter what the product, these are the psychological pressure points for consumers / business consumers.  The latest example of this style of pricing I have come across was for EasyTweets.
2. Up-sell by adding value: Above the basic plan, offer more value in return for a higher spend.  You can’t control how much your customers think your service is worth but you can control  how much value you can add at each price point.  On level up from the basic plan will be the €19 a month for consumers and €49 for ‘business consumers’.   
3. Look for ways to build in some kind of obsolescence:  Blinksale, BackMeUp and Basecamp all use this model.  After you start using more than x number of invoices/megabytes/projects a month you need to upgrade to the next price point.
4. Always have a plan you don’t think anyone would buy:  Because you don’t know how much value your customer will place on your service, always have a top plan or price you don’t really expect anyone to buy.   In any restaurant, the most popular bottle of wine will be the second least expensive.  This is because guys don’t want their dates to think they are cheap – so they don’t want to buy the cheapest bottle on offer.  At the same time, they normally are cheap, so they buy the next one up.  In a similar way, some people don’t want to appear flash – and will feel it more ‘reasonable’ to buy your middle plan as long as there is something above it.  Of course there will be others out there (about 5%) who have to have the best plan available.  Don’t forget to come up with a way to take their money and deliver a suitable level of value. 

On the Piehole project we added a top plan for almost €2,000 a year  - not really expecting anyone to buy it.  When we did add the plan however – two things happened.  

1. Sales of our middle plan went up.
2. Two people actually bloody bought the top one.

We are delighted that we were able to deliver enough value that someone would consider giving us that much of their hard earned cash.  As it turns out – they both made their money back in the space of a couple of weeks.