March 31st, 2010

The oftentimes prohibitive cost of data

When costs for a particular product or server get prohibitively high, typically in a monopoly situation, it’s a great time for a startup to come in and level the playing field. Competition is the golden key to creating a price point that matches supply and demand.

Yesterday i reached out to a company i found online that offered movie time data and a cool affiliate program that could let my site visitors buy tickets, creating a nice affiliate revenue stream. In the ideal world, the data stream would be free, which would then increase the amount of tickets sold through a now increasing amount of affiliates. In this theoretical world, the movie producers would think logically and offer this data to anyone, knowing that more access to tickets = more sales = greater profit.

The pricing i received back from the company was somewhere between mind-blowing and ludicrous. $3,500 PER MONTH to access the data. That’s $42,000 a year. Absolutely ridiculous. Of course they also have a similarly crazy pricing plan where you pay $0.25 per screen per week. So for a typical 12 screen theatre, you pay $12/month just to see what times movies are playing. Now of course if you try to build any sort of national app that integrates a users geo-location, you’re looking at much more than $3,500 a month if paying on a per screen basement.

I’m sure somewhere in this company a sales guy is doing the math for us entrepreneurs – Why spend $15,000 a month by paying per screen when I can get you EVERY screen for just 12 easy payments per year of $3,500.

If anyone hears of a better alternative, somewhere in between scraping the data and paying through the roof for it, i’d love to hear from you.

March 30th, 2010

Mass Mailing and the need to reduce waste

Today my mailbox was full of mass mailings, all from Dell, all the same offer. Each envelope had the same address, business name and suite. The only difference: The person it was addressed to. If Dell could simply find a way for their database to know we are all from the same company, they could save 75% on their costs to market to me. Multiply that by the millions they send to and you begin to see the savings that are possible. There must be a smart young company out there ready to pitch Dell on their magical savings solution.

For now,  I’ll just keep on shredding.

February 4th, 2010

Telecommuting high above LA

Alex was nice enough to find me a desk at her new office in LA. Not a bad view!

September 20th, 2009

Funny e-mail marketing response

Anytime you we do email marketing there are alway a few awesome replies that give us all a good laugh. We recently sent out emails to ASU as a result of referrals from other users. We received this awesome reply:

———————————-

Hi,

Asu did not accept me to a phd program. It is offensive to receive an email from you. Please adjust your marketing strategy accordingly. Thanks.

———————————-

I kind of feel bad for this guy – funny that he finds us offensive though!

August 29th, 2009

To truly realize progress, look back two years.

I found this ripped piece of paper from just over 2 years ago when CampusLIVE was in it’s infancy. Boris and I were in a small office, just under 300sq ft. This was our first organizational chart. I can remember how exciting it felt to create this. Fast forward 2 years: from 1 school to 88. From 2 employees to 10. Progress

Look back through your notes from 2 years ago. It will show you that you truly have made progress, even in the times you question it.

August 11th, 2009

Talking about dreams or building realities?

An interaction with a cashier at Best Buy today reminded me of my time in purgatory working at Staples. Day after day I’d show up – the only thing that kept me going was knowing that each paycheck  brought me closer to opening the JaredWeb office. It was frustrating to say the least, but I knew there was an end in sight. I’m not sure that the cashier today saw any sight ahead until i gave him a little advice.

He saw my business rewards card and asked me what kind of business i was involved with. I quickly replied “anInternet company” and thought that would suffice. He chided. Turns out he was a Comp Sci major at a local college and knew all about CampusLIVE. He praised the work we did and said he dreamed of making a million dollars. He went further saying he knew he’d never have a million dollars in his bank account – it was simply a dream.

I left him with one piece of advice: Throw some ambition behind your dream and you’ll be surprised how it becomes a reality.

What dreams do you have that are really just realities without the ambition behind them?

July 14th, 2009

A great night out with Keith Ferrazzi and the Greenlight Community

Some of the CampusLIVE team and I rode the T into Boston last night for a Keynote by Keith Ferrazzi, by far the favorite author of our staff. He was speaking about his new book titled “Who’s Got Your Back“. If you haven’t read Ferrazzi – now is the time.

The CampusLIVE team with Keith Ferrazzi

I knew the night was going to be great after Keith ended up in our elevator. We introduced ourselves and he showed a genuine interest in what we were doing. We all headed into the keynote at this point.

Keith is incredibly inspiring and the exercises he had the audience go through clearly resonated with the crowd. After discussing how we all needed to go home and really put his ideas to work he pointed out our company to the entire audience. He said we looked like a “Group of Mormons” which everyone got a chuckle out of.

After the talk almost everyone took off – not us. Anyone who has read “Never Eat Alone” knows one of Keith’s big lessons is to plan your attack and to be audacious – Get out there and find a way to meet the people you want to meet. We knew Keith would appreciate us staking out his entourage after the evening.

We stuck at the exit of the room and like clockwork Keith walked by us and invited us to drinks after his dinner with the governor (Deval Patrick). I was impressed – I’ve never heard someone say so matter of fact that they were having dinner with the governor.

Keith Ferrazzi's Birthday Cake

It turned out that it was Keith’s b-day and the governor was having dinner with him and about 25 of his close friends. After the dinner we were invited into the party and had a great time with Keith and a lot of the Greenlight crew. We bounced some questions off him and got some great feedback. The even invited Mark to play some guitar for the guests – we couldn’t believe it.

Lesson learned: Always dress well and be ready for anything. You just may see the governor, sip champagne and cut birthday with your favorite author – all without expecting it.

We told Keith we’d get back to him in a few weeks after trying to implement some of his strategies. I have a really good feeling that his feedback is going to make a big difference.

July 6th, 2009

Do you bill a customer when it costs you more than whats due?

My bill each month for Amazon AWS web services is exactly $0.02. I have a self-hacked backup solution that runs through another cloud carrier. I use amazon for a few I/O calls a day – resulting in $0.02 in charges per month.

The question is, why do they bill me? Surely a CFO or smart board member realized that billing someone $0.02 actually costs them money. Merchant services charge flat fees + percentages for every transaction. This is usually something like $0.30 a 3.5%. I’m sure lower rates are negotiated by Amazon, operating on such a massive scale. But still, there is no doubt in my mind that Amazon spends more money on processing my payment than they make off me.

Another interesting scenario is when Comcast sent me a refund check for $0.24 inside an envelope with a $0.42 stamp on it. Why didn’t they just credit my account?

I wonder if any companies have policies where they just don’t bill clients when this happens?

October 30th, 2008

Sales vs. Support – Customer Service 101

Which call takes the priority? The customer you’ve already signed up and needs assistance, or one interested in signing up?

The trend is clearly towards answering the new calls, the ones that will put more money in your account that minute. Many of the companies I’ve called this week and chose “support” go straight to voicemail. If you chose the “sales” option instead it goes right to a real person. Knowing this I always choose “1 for sales” and convince them to help me.

My argument in this dilemma is that customer support should be at least an equal priority to answering sales calls. You’ll soon find that happy customers will refer you to friends, creating an ever expanding sales pipeline.

January 20th, 2008

When is it a good idea to stay small?

There are a lot of interesting businesses in the Amherst area. Being a college town that survives off the spending of students, there are many creative ways that business owners have managed to expand their services to cater to the 25+ demographic. The reasoning behind this is simple – students aren’t always in town spending money (winter and summer break account for more than 4 months of the year). Here are a few business that are trying this:

Amherst Coffee (great expansion idea)
I was very interested to try out this new cafe in Amherst. They gave a very good first impression. The idea of a simple $1 cup of coffee was great and the interior was very well done. You could tell the owners spent a lot of time on the decor. It made you want to stay, and relax. Instead of couches they have large cushioned platforms right up against the windows. You can sit/lay/etc.. on them. This is an interesting experiment that looks to be working great.

Expansion – Although coffee is a great product with a great markup, Amherst Coffee came up with a great idea to turn into a wine bar at night. Driving by at night I often see many people in the windows, enjoying a glass of wine. The profit margin of wine is lower than coffee, but the cost of a glass of wine is at least 2x more. I’d assume their earnings from nightly wine sales are similar to that of their daily coffee sales.

The Pub (very very good expansion)
I’ve heard from many people that The Pub has the best Pub food in Amherst. After eating there a few times I’d have to agree. Portions are generous and as an added bonus the manager seems to only hire the most attractive waitresses he can find. Subsequently our company meetings are regularly held here.

Expansion – After 8pm the Pub completely changes. Dance lights come out of the ceiling, the cooks window turns into a satellite bar, and the tables are moved to the corners to form a dance floor. The first time I went here after 8pm for drinks it was comical to see just how different it was here at night. I wondered if the families that came in to eat during the day had any idea that it becomes a nightclub within an hour after they leave. It doesn’t appear to matter because The Pub is packed day and night because of it. Without a doubt, a great idea.

Souperbowl (poor expansion)
There aren’t many places in Amherst that serve really good soup. Fortunately Souperbowl is close to our office and I really love eating there. I’d much rather patronize a local, small business than one of the corporate chains. Homemade is better, right? The Buffalo Chicken Chowder here is my favorite – nice and spicy.

When i first visited SouperBowl they had a small corner store (pictured left). It was just the right size for a place serving soup and sandwiches. There were 6-10 tables. This gave it a small, warm feel. Perfect in my opinion.

Expansion – I was very, very surprised when i came into SouperBowl’s new location a few days ago. They had more than quadrupled their size, now with more than 25 tables, seating for an estimated 100+. Even more surprising was a 25′ wine/beer bar. The bar is very sleek and modern – probably one of the nicest bars in Amherst. There are a few problems with this expansion. First, what is a bar doing in a restaurant serving soup? I drink moderately, and I can say I’ve never had the urge for a beer or glass of wine while standing in line for soup. Another problem is that there are already 10 or more very popular places to drink in town, maybe 20+. I can’t imagine students on a Friday night heading to a soup shop to drink with friends. The two just don’t mix.

I’m very curious as to why the owners decided to spend the tens of thousands of dollars on remodeling, obtaining a liquor license and more – all for the occasional odd character who finds it enjoyable to drink at a soup shop. It will be interesting to see if the students next semester agree with me. For SouperBowl’s sake, i hope they don’t.

In Summary
It very interesting to see these businesses expanding in creative ways. It’s often surprising what works and what doesn’t. Sometimes the most whacky and creative ideas can succeed (bar in a soup shop anyone?). With my most recent startup CampusLIVE i’ve relied on the friend test to decide whether my most creative ideas are worth persuing. I ask 20 or more of my friends whether they think it will work. If most of them do, I go for it. Worst case the idea fails, but I’ve learned something in the process.