z on life

Great thought experiment: how would you sell water*? This is much like one of the stereotypical Microsoft interview questions of “how would you sell ice to an eskimo?” and is a cool exercise to go through just for fun.

Here’s how I would do it. Put the water in an interesting bottle. This bottle has 5 different openings from which to drink. Maybe one on the top, one on the bottom, and three on the sides at different angles. At this point, ergonomists, environmentalists, and production managers alike are probably freaking out at how user-unfriendly, plastic-heavy, and expensive this product would be, but just bare with me.

Now, let’s include a marketing spin on the consumption of the water. Not only is this a ‘premium’, ‘hot’, and ‘blinged out’ product, but we will push the idea that the opening you drink out of ’says something about you’. For instance, those who drink from the top are traditional, those who drink from the bottom are rebellious, and those who drink from each of the side openings are wild, cool, and bad-ass respectively.

What’s the goal of this? It’s to get people to self-identify with one of the methods. If you can successfully pull it off, you’ll have created an interesting dynamic between the product users where they argue over the best way to drink. Soon you’ll have trash-talk dialogues going about how “top-drinkers are un-cool” or “left-side-drinkers are the $&!^”. This is exactly what you want. Not only do you have to put thought into which way you drink as an image statement, the choice of buying another brand of water will become a huge social detriment. If you buy a different brand, you lose the ability to express yourself. You become a generic person. Yuck! Who wants to be generic? No one does. And that’s the beauty of it.

Take this a step further. Let’s get 50-cent to have the water in his video. Maybe he can even throw in a line like “The realest playaz drink from the right. Damn this water is tight.” Next thing you know, hardcore 50 followers everywhere are buying up bottles like crazy, eager to show off their loyalty and get some street cred. Things only get better when Kanye raps about “I only drink from the top, cause it gets me goin and I just can’t stop”. Kanye fans rush to grab some bottles and drink from the top to show how he’s the man and Fifty is uncool. Now you’re golden**. Everyone who chimes into the debate further boosts the sales numbers. The more controversy you can raise, the stronger the dedication will be, the more water will move off of the shelves.

Now in all reality, pulling something like this off is far-fetched. There’s a number of serious problems with this strategy above and beyond the less-than-serious issue that Fifty was an equity holder in Vitamin Water and thus has a conflict of interest. Joking aside, we see similar things in the consumer world every day. It’s like wearing the Yankees hat with a perfectly flat brim and the sticker still on. Surely it’s not more comfortable, and it’s not as if the sticker has utility value. It’s really an image thing. How about paying 5 times more for something because it has Gucci tags? At the end of the day it just makes the wearer ‘feel’ good. How about shooting out T-shirts into the crowd at a baseball game? You don’t pay for an expensive ticket to catch t-shirts, you pay to watch baseball, but fans love the t-shirt toss and often remember it more than the game nonetheless. How many people wear Tag Heuer because Tiger Woods does? How many people bought a LiveStrong bracelet, not for charity, but because it was the ‘cool’ thing to do?

The learning lesson here is that you shouldn’t always just think about the actual product you’re working with as the thing you’re selling. You could be better of selling an image, a feeling, a status symbol, supplementary activities, or personal meaning. If you can surround the most boring of products, ie: water, with a really super-cool context and get people riled up about it, then almost any other product should give you way more leeway. Instead of getting caught up on the idea of creating the perfect product, settle for an okay one. Instead think about all the little things you can do to get people feeling excited to use your product, either directly or indirectly. Sometimes its the subtle mini-emotions evoked by products that make the difference, not the shear utilitarian value. The more you can get people to use your product because of what it means or how it makes them feel and not because of what it is, the better. If you get to this point, you’ve created personal value for the user, and you have created an arbitrage. Personal value is free to you as the product creator, but worth lots to the customer. And when you’ve made some, it’s like you have a license to print money because what makes you money costs you none.

So, how would you sell a teenage girl MySpace? Would you talk about social networking features and news updates and friend lists? No, of course not. This is like selling water “because it hydrates you”. The magic isn’t in the utility, it’s in the soft experience. The sell for MySpace is in the ‘wow’ moment when she is done customizing her profile with glitter, blinking text, a custom sunrise background, 4 YouTube embeds, 3 celebrity photos, a blog post, a music player bumping, and an ‘about me’ where she answers 100 personal questions. The sell is when she takes a step back and says, “yes, that’s me, and I love it!”. Again, it’s not about utility. It’s about what it means.

How would you sell water? How do you plan to sell your web 2.0 idea to users? If it’s just great features or great technology, you’re probably still leaving something on the table.

* - Credit for this great hypothetical goes to Andrew Chen.

** - If you’re not familiar, Kanye and Fifty have had a bitter on-going rap battle for a long time and fans of each side usually take vary strong stances and are never hesitant to show support.

When you’re creating a web property that you intend to ‘go viral’ with, whether it be a Facebook app or full-blown destination site, you’re going to have to meticulously track the growth to understand how you’re doing, where improvements can be made, and so forth. Tracking the growth correctly is actually very hard and even the most rigorous analytics can sometimes fail to reveal the true growth rate.

There is one easy trap to fall into, and it’s one that I just did, so I thought it would be good to talk about. The trap is in not understanding that you may be locally viral, where being ‘local’ is defined relative to some super-specific demographic, or user-behavioral context. In English? You may only be viral for some small set of or narrow type of users that will quickly adopt whatever it is that you’re making. However, if that demographic isn’t sufficiently sizable, you may burn through all of those people and be left with no new users to acquire.

The worst part about this is that, early on, you may see excellent growth. My roommate/coworker Aman Gupta and I recently released the ‘Hotter Than’ Facebook app as a pet project. It took a few hours to build and was a fun experiment (it’s not by any means our day-job). When we opened the floodgates, we saw in the first week a doubling day over day. If you study viral, recursion, and logistic growth from a mathematical perspective, as long as the remaining population of potential users is large compared to the amount of current users, your growth per new user on day N should be a good indicator of growth per new user on day N+1.

So have we continued, then, to double day over day? No, in fact growth has slowed to basically nothing. Why is this? Well, from looking through the raw data logs, we can see that during our growth phase we had spikes of users in very specific demographics. Moreover, it is fun to look at who was actually sending out invites. It turns out invites were sent mainly by a few categories of users: older, international, small friend networks. Now certainly, there are plenty of older people and international people on Facebook, many with small friend networks, so shouldn’t we have spread like wildfire through these huge demographic categories?

Interestingly, no, and here’s why. We thought a bit deeper about this and it turns out these were all indicators of being a newbie Facebook user. The average Facebook power user is something close to a United States college student with tons of friends*. The farther outside of this age, location, and dense friend networks you get, the less savvy the users likely are. We were way outside of this.

So what does that tell us? What we actually probably got were users easy to trick into viral invite processes, and thus, our invite scheme was not effective, logical, and enticing enough to hit the mainstream. Thus, we prayed on a few ‘fish-in-a-barrel’ types for whom this was likely a very early application install in their personal Facebook lifecycles. These people were most likely not aware of the ramifications of spamming friends and were thus much easier to convince. We burned out those users quickly and eventually there were no new accessible users who would succumb to the virality. After day 7 or 8, the growth halted and the usage flat lined.

Moral of the story, you need to understand exactly why people are taking the bare and sending your invite. Is it appropriate only to a certain culture, age, or interest group? Or can it be generalized to the mainstream? Hopefully, when all is said and done you’re not just tricking newbie users like we were. If you cannot generalize to the average user, then you’re early growth may not be any indicator of future growth so don’t get excited until you have a diverse set of users who have proven acquirable across enough of the spectrum to make the pool of potentials huge enough for a macro-success. It’s crucial to know where are you viral? Is it local, or is it global?

*note: This definition of an FB power user isn’t backed up by any data and is more by ‘feel’. Thus, the reason for our failure is still a hypothesis, not proven fact. The point here isn’t to know exactly what users we attracted, but to understand that those initial users were not normal and their affinity for our viral hooks was not generalizable over the whole population.

Doing a startup and dating are similar in lots of ways, so it felt right to share a few thoughts on that. It should be noted that this is a guy’s perspective on dating girls and being that I have no other perspective to pull from, it will inherently be a bit biased. That said, I’d love to hear a girl chime in on this one.

Okay here we go:

Startups and girls can both cause you to think irrationally and can lead to bad decisions. When you get really involved in either, you stop thinking about what is right and just about what you want. It’s almost never good to make emotional decisions in startups, but it happens all the time. This is how founders stay with a sinking ship for way too long, sell out way too early, or tear a company apart due to irreconcilable differences. It goes without saying that the dating metaphors of those things in the last sentence should be crystal clear.

In either case leaving them is really, really hard and there are lots of variables in the decision. In both contexts, you can definitely ruin your future, credibility, career, and even friendships. Worse yet, the more money involved, the wilder the severance will be. On the other hand, leaving can be the best thing you’ve ever done, depending on the situation. In either context, it’s hard to make the right choice.

Getting girls, like raising venture funding, is easiest when you have someone on board and can be terribly difficult when you don’t. Psychologists and pickup artists alike would agree that the social proof of having a girlfriend makes it enormously easier to meet girls. Likewise, getting the first term sheet is much harder to achieve than the cascade of attention and interest that will automatically follow with VCs once there is someone leading the round. You get the most, when you need the least.

Everyone wants a Cinderella story whether it is the story-book romance of meant-to-be high school sweethearts or becoming the next Mark Zuckerberg. The truth is, very few will end up like this in either context, but everyone wants it nonetheless.

It’s important to know what the goal of the commitment is and that expectations are set early. If one co-founder wants to go all the way and make a billion-dollar business and the other wants a flip, there will be some intense arguments along the way and things probably won’t work out. Likewise, mismatch in relationship commitment and goals is just brutal, and leads to nothing other than vicious breakup or complete entrapment. Both cases sound pretty sub-optimal.

Marriage is the IPO of life, unfortunately most are left wanting more. Marriage is one of the biggest life goals for many (sorry to those who would argue), but less than half of marriages keep people happy enough not to have another one later. Serial entrepreneurs with 9-figure exits and enough accomplishment and money to keep most normal people happy for multiple lifetimes continue to get back in the game over and over again. I guess the best entrepreneurs love to trade up?

There’s always anxiety on the launch pad whether its picking up a girl in a bar or launching a product. Neil Strauss in “The Game” argues that guys need to pick up a girl within the first three seconds of seeing her or it is a blown chance. You’ll just keep waiting for the perfect moment or convincing yourself something better is coming but you’ll never jump. This is so true in startups too. If you get close to a product launch and keep pushing out one more feature, one more detail, one more design, you’ll never launch. It’s always one more day, or three more seconds.

Girls, like VCs, are looking for a track record and will want to know a relationship history. It’s among the first thing girls ask, often indirectly, and its also why sites like DontDateHimGirl.com exist in the first place. Likewise in venture, referrals and personal references for a core team will make or break the diligence process. The question is, should there be a DontFundThem.com variant, or conversely, should guys go on dates with a relationship resume?

Fail fast and iterate definitely applies to both domains. You only have so much time to start successful companies. So, you need to start that career progression early and grow yourself with the steepest possible trajectory without the fear of the failure that is inevitable. Analogously, meeting girls is exactly the same in that failure is inevitable but the learning process tied with failure is crucial. The more girls you meet and interact with, the better you will be at seeming interesting to future ones. You only have so much time. The clock is ticking. And one of those future ones will be ‘the one’ so you better not blow it. Are you ready?

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So, since dating and startups have been proven to be basically equivalent, the key questions still remain. Was Silicon Valley built by great ladies men? Are charming guys better than most at building billion dollar businesses? Or are my only-half-serious theories completely off-target? At the very least, hopefully they were entertaining :).