Create your own video slideshow at animoto.com.

So after a little bit of of ducking and diving, the Jason Calacanis “This Week in Startups” global pitch event is ready to roll in London.  London has the most signups of any city so far on http://www.meetup.com/startups/.  I have spent the day testing the venue, gathering bios from the speakers and confirming the line up.  The following people will be presenting.

Dimitar Stoyanov from ovia.me.

They are currently in private alpha with the University College London.  They won mini Seedcamp Berlin last month.  Watch a brief video as ovia.me to see how it works.

Phil Woodward from HipSnip.

HipSnip connects the real world to the online world, and makes it social.  They  enable people to use their mobile phone to easily connect with a real world product or service that they want.  HipSnip then makes that content social, retrievable and up-datable.

Lieven Van Marcke from GNU trade.

A financial gaming company with a unique offering designed to make trading more accessible to a mass market; next week they’re also launching a new version of our platform wrapped up in a casual gaming Facebook application that allows people to create and enter global trading competitions with friends and back the performance of other players.

Finbar Mostyn-Williams

People take useful resources from on and offline (ingredients) and put them together into lists (recipes) to help other business owners/ practitioners improve certain skills. The collection of recipes is the cookbook. Some recipes are free, some paid. Ingredients include: events, courses, books, blogs, videos, slide-shows, interviews, articles, actions etc.

Lee Mallon from Purecause

Purecause is a service which enables students and graduates to gain useful industry work experience whiles helping charitable projects. Your a graduate you can’t get a job because you don’t have a portfolio. With purecause you spend some time over the summer completing purecause jobs, by September you have portfolio, an insight into the industry and a peer network from your involvement. Now your a more tempting employee whiles helping some good causes.

There is £5 payable at the door.  The pitches will start from 5.30 sharp.

In other news, congrats to Steve for setting up a @twistldn twitter accound and www.twistldn.com website.  Register at http://www.meetup.com/startups.

There are things about a retails businesses that I really like.

• You sell the same product over and over again (little or no customisation per sale)
• You have hundreds of customers paying tens of euro rather than a few paying thousands.
• People are normally pretty sure of what they are going to get, making it easy to meet expectations.
• If you can run one shop, you can probably run two and so on.
• They handle ‘real’ money (Starbucks turns over more than most of the Irish web business’ combined)*.

There are of course a bunch of things I don’t like about them

• Capital intensive (although  my opinion on this might change if I had more capital)
• Requires staff
• Turnover is high, but so is the potential for downside.

Thankfully, I’m getting the chance to learn a little more about retail without having to put anything on the line.  For the next two months, we’ll be living in London, helping to promote The Flying Burrito.  It is a burrito bar opened by my soon-to-be brother-in-law.  Located in East London, they have been operating for three months.  Thus far, my main contribution has been to put together a website ordering system for them (not yet released).

So are we abandoning Piehole?  Well, not so much.  What we’ve come to realise is that if the two of us work on Piehole full time, it doesn’t make twice as much as only one of us working on it.  In fact, it pretty much makes the exact same either way.  I guess this is the downside of not ’selling time’.  If you do have an hourly rate, all you have to do is sell more hours.  In our case, putting in more hours doesn’t tranlate into more income unless those hours are on an in-house sales effort.  Thus, while we are up there, we’ll split our time between promoting the Burrito bar and working on Piehole.

It is also the start of looking at ways that Priscilla and I can have a choice as to how much time we spend working together.  We’ve had a hoot so far, but I’m not 100% sure that working with your partner is a great idea long term.  Hopefully, by the end of the summer, either one of us will be able to take over the reins completely if necessary.

I’m looking forward to London on three counts.  The first is that we get to see how a ‘real’ business works.  Second, we get to help the guys out in a meaningful way.  Third, its the last stop before we head to San Fran for a couple of months.

Going to CA is all about exploring whether it really is the place to build a web business.  I expect to meet some interesting people out there and help to boost our own rather home-made efforts at building an online business into something more stunning.  Other than that, there is no great plan behind it.

* Turnover is however, every different to profit.

average human can hold in working memory is 7 ± 2

When I was in computers science school, this was pretty much the extent of our UX training.  Don’t put more than seven items in a menu and you’ll be fine.  It would probably be better off put in our business class.  Miller was a congnitive psychologist and his book on the limits of human congnition, was based on reasearch showing that, bascially, humans have limits on their ability to process information, and numbers.

This is a problem for me.  I’m trying to grow hundreds and thousands of customers, paying tens of euro a month for some service.  I can’t possibly keep each customer in mind and individually.  Also, there are hundreds of payments to keep track of – this needs to be simplified.  Most importantly, its hard to see the wood for the trees.  Some days, we only get 1 €18 payment in.  Its easy to freak out when something like that happens.  That is why we’ve been spending more time aggregating all the hundreads of transactions, from phone calls, to emails, to payments.  We’re fighting back against Miller’s law.

We built a pretty Minimum Viable CRM to gather the basic information.  It pretty much still works as described previously.  The only addition has been the ability to add notes by forwarding emails to a dropbox and the ability to initiate payments from the contacts home screen.

Thats not really what I’d like to blog about however.

On those €18 days, I tend to get a bit freaked out.  Because my brain is average and cannot really appreciate big numbers, percentages and more than 9 digits at a time, I need some way to ’see the wood for the trees’.   One of the most motivating (and therefore profitable) things about our CRM system is we are starting to have overview figures available to us.  How many calls were made this week, how many emails went out.  How many people upgraded.  Brian has a really nice post overviewing some of the fancier dashboards available online.

Aggregating live sales data down into average sale, average number of purchases per customer, conversion rate, really helps in the dark days.  Standing back, you can see how the whole thing comes together.  It makes the non-obvious, obvious.  Even though you might have had a terrible, day or week, having the total ‘broad view’ sales picture a click a way, can help you get back up and keep plugging away.  IMHO.

@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.

Just before Christmas we were on RTE’s The Business – a program with a listenership of 200,000 people.  It was great for getting recognised by mates or the odd bloke in a shop (don’t ask how you can get recognised from the radio, but it happens) but rubbish when it comes to converting sales.  Out of the piece we got exactly 1 signup for a Piehole voiceover training day.  I’m not sure what type of conversion rate that works out to, but lets call it close to zero.

The excellent Rob on Software makes the same point in a recent post.  All traffic is not created equally and much of it can just create ‘noise’ – making it much harder to figure out what is going on in your Google Analytics account.

With no background in statistics or even any data to back me up, I’ve created this completely fictitious 3d pie chart to illustrate the way I think about conversion rates for a new product.

It comes down to this.  The number 100% gives the illusion that there are only 100 possibilities – or options.  In reality there are infinite number of possibilities – and for the purposes of you and your product – the likely-hood you and I should prepare for is 0% or a figure so close to it that it completely mucks up your plan.

Now while this post is full of completely un-researched here-say, Rob has put together a altogether more scientific list of traffic generators in order of quality as measured by the conversion rate.  I’m posting a clip here so you don’t just head over to his blog and start reading instead.

Now I might quibble with the position of 8 and 9.  In my experience, Adwords does convert better than organic traffic – but I guess that depends on where the organic traffic might come from.

So what?  Well – the first step is to figure out what your conversion rate is.  That means tracking how many actual sales you are generating.  In a traditional e-commerce website this might be pretty easy.  Oftentimes, especially if you are driving traffic to someone else, it might not be.  If you are making money by generating work for someone else, it is not always easy to track.  That is a problem, especially with these 0% conversion rates hanging about.

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?

When we switch business from one provider to another, we see it as a healthy part of the free market process.  It helps companies to shape their service and improve their offering.  We don’t really have the same feedback to government.  Elected officials are primarily an overpaid complaints department and while they have power, the mechanisms of government are so unweildy, that the feedback loop is almost non-existant.

Your feedback will be far more keenly felt if you hit them where they are hitting you – the pocket.  Given you are reading my blog, I take you to be an high functioning, well mannered, erudite asset to the country.  Rather than give out about the taxes and the poor service, and if you really have the courage of your convictions, you have to leave and withdraw your tax contribution and expertise.  Give it to a competing economy that deserves it more, and in the process, help make Ireland a better place to live.

But isn’t leaving a bit drastic?  Well here are a few ways to soften the blow for you.

1. You (hardly) have to pay any personal tax: Having lived in Argentina for the last five months, I can tell you that the cost of living here is about 1/3 of that at home.  That means that the local tax thresholds are way lower.  That means, in terms of purchasing power, the 40% tax threshold of €35,400 translates to €100,000 of purchasing power.  Can you imagine paying 20% on a €100,000 salary in Dublin?  Better still, if you can stay out of the country for 183 days, three years coming, you don’t need to pay income tax at all.
2. You don’t have to make any VAT returns:  Dove tailing nicely, the VAT registration threshold is €37,500.  This means, if you can find a cash-flow of just under that with a high margin (such as selling time as a programmer/architect/other).
3. Bring your friends:  Telcoms really has come a long way.  One long time coming innovation that is fast coming up the tracks is video conferencing.  Its been 13 years since I had my first teleconference involving roughly €400,000 worth of telecoms infrastructure.  After all that, it managed only to switch to whoever happened to be picking their nose at the wrong time in the call.  Now however, telepresence is almost among us.  Using Google video chat we’ve had hours of arguments with family and friends back home.  At times you really do start to forget that they are so far away and I can see the time when keeping up with friends via teleconference will really be possible.  It may seem a little weird, but I do see keeping in touch with friends becoming more of a possability.  It is not quiet teleporting, but it is getting close.
4. Have it both ways: If you do get fed up for the red wine, sunshine and great steaks, you are about 15 hours and €800 away from home.   Out of your €35k budget you can put €7 towards tax, €20k towards living and still have €8k to pop home once or twice or three times a year.

That is all you need to poke one in the eye for the Irish government.  Just sit back and relax and wait for a couple of years until they come groveling back, begging for attention.

Okay, so that won’t happen, but next time you find yourself complaining, remember you have a choice.

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?

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.

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.

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.

So when is the same thing going to happen to specialised search?  I’ve watched with some amusement as Google gets more and more specialised in their search results – displaying maps, currency conversions, timezone information and phone numbers for local services.  Feck it – Google can even get you laid in Buenos Aires.  Why pay a dating site?

So what is little old Piehole to do?  We have some well funded potential competitors who could decide to creep into our corner of the web.  Right now we’re pretty happy with the state of our competition but just as the music business found out – not everything stays rosy forever.

At the same time as watching search get more and more specialised, I spent a good bit of time studying the MLM community.  While it isn’t something I got involved with  – I think there is something to learn from what is going on there.  Most MLM or affiliate schemes effectively pay their network for sales leads.  Traditional index websites are also charging for these leads but the leads are bought in bulk in the form of a monthly subscription.  You aren’t guaranteed any leads at all in fact.  You are just sold the opportunity to attain leads.

In pretty much all industries, this works out better for some clients than it does for others.  Not everyone on maybfriends ends up with a wedding ring – or even a date.  Some end up with all the dates they can handle.  The site works the same for all but some are just cuter/smoother/younger/slimmer than others.  In effect – the ugly ones are subsidising the bold and the beautiful.  Great news if you are a looker.  Not so great if you aren’t.

This doesn’t seem right and I think – eventually – the market will correct this.  Either – as in the case of the dating websites, free alternatives will come in (eg: plentyoffish.com) or something else will happen.  For obvious reasons I’m hoping it will be something else – and here is my punt on what that something else is.

Subscribers to index websites will stop subscribing and start paying for leads like they do in the affiliate market.  You only pay if you actually manage to get that date or finally manage to actually get someone to view your property.  The reasons why we don’t pay be the lead at the moment is largely down to the cost involved in collecting variable amounts of money from many clients.  There is also a certain difficulty in verifying that a lead was valid  – but none the less  – there will be a move towards more accountability for in lead generation.  Rather than pay for a month on a dating site – why not pay more for an actual date (legally of course)?