SharpStyle Labs

Not a technical session, but one of the most useful that I attended. Keep in mind that I was looking at the conference from the point of www.reviewbasics.com co-founder.

Troy works for BussinessObjects and has experience with angel-funded startups. You can find his blog here.

Session description is here.

Six timeless business principles

1. To maximize our revenue (more customers, more things, more often for more years, for more money)
2. Find the sweet spot (intersection of the following: something you want, something the market wants, somewhere people want to work)
   1. Something you want — follow your passion so that you don’t get bored
   2. Joining or disrupting a Market is the fastest (and cheapest) route to success
      1. Create a market – very expensive
      2. Join a market — make sure it is a “need”, not “nicety”.
      3. Disrupt a Market
   3. Find a market large enough for your aspirations but small enough to dominate
   4. Do not go after 1% of the market even if market is huge (all PC owners) – automatic fail, look for 30-40% goal
3. It’s much easier to launch a business by riding a wave (or two)
4. Find your “blue ocean”, Zag when others Zig, and be Distinct
5. We need to LOVE our customers
6. Chase TWO rabbits, catch NONE — do not spread yourself too thin

Nine Web 2.0 business principles

1. There are five business models
   1. Ads
      1. Real money is here: Premium Sponsor, Premium Advertisement, Affiliate Networks
      2. But many of us are focused here: Ad Networks, Google Adsense
      3. “page views” start loosing importance b/c of Ajax
      4. “Circle of Trust” — make sure that advertising/advertisers are aligned with your customers so that they are a part of community instead of disruption
      5. Sales people going after advertisers should be in house with Ad background (including paper/print)
   2. Transactions
   3. Subscriptions
   4. Commissions — examples: Ebay, etc
   5. Gamey — not sure who will buy (Ebay, Google, yahoo, etc), need to have backing to wait it out. Do not count on it. out of 10, 000 Web 2.0 companies only ~60 companies were acquired
2. Warning: Making applications fast, pretty or functional may DECREASE revenue
   1. Deploying Ajax on Ad support site will cause a drop of 30-40%
3. Our customers will help us design, build. maintain and run our company.. if we let them
4. A hard-to-recreate data source can be valuable
   1. Example: Amazon bought incomplete ISBN catalog and their customers filled in all the missing pieces
   2. Advanced Economic Research – company has all the Ebay transactions and does data mining
5. The mashup ecosystem is exploding, but revenue opportunities are still “in progress”
6. Design our applications to run across multiple devices
7. Deliver software on demand
   1. “SaaS hits the hockey stick” article on ZDNET – in the last year we went from 20% to 50% of companies are considering to run mission-critical applications in SaaS
   2. Allows software company to see how their software is used
8. A niche market is not the same thing as a long tail business
9. We need to get to critical mass in quantum leaps as fast as we can
   1. Do whatever is needed to grow fast, not organically
   2. If growing organically, somebody will pass you
   3. Partnerships, accusations, etc

Things to look into: 

• www.turn.com — manage ad networks
• www.plentyoffish.com — number 3 dating site that runs on 5 servers in the living room
• Game theory — users are not addicted to a very easy game. bring the same concept into website development. make it hard enough to cause addiction. rather counter-intuitive
• Consider not making social website very good looking/polished — people seem to trust more websites that are “ugly”: google.com, craigslist.com, plentyofpage.com
• Book from Oriely about customer helping build your software – ask for name
• Book: Zag: The Number One Strategy of High-Performance Brands
• “SaaS hits the hockey stick” article on ZDNET – in the last year we went from 20% to 50% of companies are considering to run mission-critical applications in SaaS
• Demand Media – bought off most of the domain squatters and now deliver “custom dynamic websites” in reaction to users’ errors when typing URLs.

~Mike