Two schools of thought on how to gain early traction for consumer-focused startups

I’m a co-founder of a startup and I’ve noticed that our advisors are beginning to form “teams” around two opposing schools of thought for gaining early user adoption.  These two philosophies are mostly mutually exclusive so I think entrepreneurs need to make a choice about which camp they fall into…   Which are you?

Payments: Critical for Social Network App Platforms?

I recently had the pleasure of connecting with TS Ramakrishnan.  Super smart guy and clearly one who know a thing or two about how to launch app platforms/APIs for social networks.

TS has an interesting short-list of four requirements for a successful social network app platform:

1. Users — the social network must be large enough to bring lots of distribution to app publishers
2. Language — platform must be backwards compatible with existing web development languages/frameworks
3. Marketing — the social network must expend significant effort to recruit, retain, and support app developers
4. Transactions –  the social network must facilitate secure transactions (i.e., payments)

I found his last requirement to be really thought-provoking…  It sounds like a pre-requisite for ecommerce transactions, but we haven’t seen a whole lot of apps pursue ecommerce models yet on social networks.  The vast majority of social apps are 100% ad-supported, but we’re starting to see some “freemium” models develop.  For instance, Slide’s SuperPoke app has Premium poke actions that users can get access to via a monthly subscription.

Even in an advertising-dominated economy, I wonder if the social apps on Facebook might monetize more efficiently if Facebook were to facilitate the payments/collections process between ad networks and app publishers?  E.g., would social ad networks operate more efficiently if ad units were rendered in FBML and Facebook provided standardized tools for measuring impressions, clicks, follow-on actions, pathing; and financial transaction support for buying/selling social ads…

The Four Viral App Objectives (a.k.a., “Social network application virality 101″)

A lot of folks have asked for more details on the way we measured and optimized viral app growth in the Stanford class I co-taught recently. So here’s a bit more info on methodology for measuring virality and what it means for an app to “go viral.”

K-factor and R-zero

Terms like “K-factor” (contagion) and “R-zero” (reproduction rate) are often used to describe the growth rate of viral apps. These terms come from the fields of medicine and biology — they’re originally intended to describe the spread of of viral diseases, but they’re nice analogies for how web/SN apps grow. Some would even describe widgets and apps as “diseases” that have “corrupted” popular social networks like MySpace and Facebook! Of course, having worked at Slide and authored some FB apps of my own, that’s clearly not my belief… So, read on if you’re interested in viral apps!

Six Risks that Venture Capitalists Take

Mark Davis of DFJ Gotham Ventures posted this nice summary list of six types of risk that venture capitalists typically examine when evaluating a potential investment.

1. Management Risk
2. Product Risk
3. Revenue Model Risk
4. Market Risk
5. Competitive Risk
6. Partnership Risk

Read the full article here

VMGOSPA – nested organizational objectives

I mentioned AlphaBlox in my last post and that made me think of something I learned from Michael Skok (CEO and Founder of AlphaBlox, now Partner at North Bridge Venture Partners).

Michael had a great framework for explaining how each person’s daily activities fit into the larger company objectives. He called it “VMGOSPA”, an acronym for the following framework:

Avinash Kaushik’s Five Levels of “Web Analytics 2.0″

I had the pleasure of hearing Avinash Kaushik, Google’s analytics evangelist, speak when he came to our CS377W class at Stanford this quarter (the “Stanford Facebook class“).  He’s an amazing speaker, really breathing life and purpose into the too-often dry topic of web analytics.

He’s promoting a new way of looking at web analytics, what he calls “Web Analytics 2.0″.  Avinash’es central message is that analytics cannot stand alone as a decision driver in organizations; rather analytics need to be considered in the context of additional data (from customers, competitors, and other internal sources) in order to drive rational decisions.

Avinash has a brilliant decision framework, consisting of the five decision inputs that should be considered in order to gain insight into customer behavior and drive optimal decisions.   He calls this “The Five Pillars” and here’s the cliff’s notes summary:

SMART objectives

 

Setting objectives for yourself and for others is a critical organizational function.  This will be painfully clear to anyone who’s ever sat in a team meeting where some “critical corporate goal” was described but no specific actions were assigned and everyone left the meeting wondering, “Ummm, so what am I supposed to do now?”

The SMART framework helps make objectives crystal clear so that anyone who is on the assigning or the receiving end of a SMART objective really understands exactly what actions are going to take place, by when, and how to measure success.

SMART is an acronym for:

• Specific: is the objective described in concrete, actionable detail?
• Measurable: what quantitative measurements will tell us when the objective has been achieved?
• Attainable: is the objective really achievable within budget and schedule constraints?
• Results-oriented: what tangible work output does the objective produce?  (i.e., not just conversations and ideas)
• Time-driven: what is the due date for the objective?

Three Dimensions of Emotion

(image from Fractal.org)

People exhibit a huge range of emotions and it can be a bewildering challenge to ascribe unique meaning to each emotional state that a person might find themselves in. A framework for analyzing emotional states can help us understand emotions by decomposing them into underlying dimensions.

Three key dimensions appear to be:

1. Valence: positive vs. negative
2. Activation: ready-to-act/aroused vs. relaxed
3. Power: dominant vs. submissive

Five Levels of Web-based Product Design

Anyone who has been involved with launching a website knows that there are lots of design factors to consider. Even a marginally sophisticated website will require development and coordination of multiple web page layouts, graphics (visual assets), text (marcomm or copy), server code, maybe some browser-side code (javascript), database tables, etc.

It can be a lot of stuff to consider and anyone responsible for launch of a product (e.g., product manager, product marketing manager, or a business unit lead) needs to think about “product design” from multiple levels.

Personally, as a product manager, I like to think about “product design” as the sum of five design perspectives:

Cialdini’s Six Weapons of Influence

READ THIS POST! 

Robert Cialdini’s insightful book Influence: The Psychology of Persuasion revealed how six “weapons” of social influence can be put to use to persuade people into taking actions or exhibiting behaviors.