Enough is enough

Ok, you win. This blog, which I rarely update, gets hit with hacking attempts multiple times each day. I’m tired of dealing with it. So, I’ve installed software that blocks requests from countries and locked it down. If your country is blocked, I apologize. But, apparently your country is a haven for hackers and the traffic from your country is causing me more trouble than it is worth.

Oh, right. You can’t even read this.

Irons in the fire

Taking some irons out of the fire

For a long time, I’ve had too many irons in the fire. If that idiom doesn’t mean anything to you, here you go. But, I’ve been juggling my consulting projects, my writing, marketing, and a number of seedling startup businesses for years. It’s just too hard to make serious progress when your focus is spread that thin. But, recently, I’ve partnered with a few cofounders on a new startup (yes, another one), which seems to really have the chance to be big. Really big. So, I’m shedding projects and activities. I’m saying “no” to more things. I just want to focus more energy behind a few efforts and make them move forward much more quickly.

We’ll see how it goes. Part of me likes to place my bets across multiple opportunities, since we all know that most new businesses fail. Sad fact, but I’m pragmatic about that. But, not putting enough energy into one business ensures that it will fail. So, time to make fewer, bigger bets.

Time to dust this blog off

Well, it’s been a long time since I have posted here. I tend to spend more time on my business blog (Brilliant Forge) and Twitter. But, I have decided that I need a place to share thoughts and activities from my personal life. In the past few years, I’ve also learned that a great way to stay committed to a healthy lifestyle is to share what you are doing and feel somewhat accountable to an audience of peers; people who may also be seeking a healthier lifestyle. So, I plan on using this blog to also capture my weekly training sessions. I find it helpful to track my progress, look back at the trends in performance, and use it to plan my future training cycles.

Who knows what type of audience this blog will find; but if you have found me from the professional side of my life, you may not be interested in this fuzzier personal side of my life. I’m not going to talk about tech startups, entrepreneurship, user experience, business strategy, revenue, etc. (other than in this sentence). That’s all on my business blog, and it does bleed over into my Twitter stream. But, not here. This is the weekend me, the vacation me, the fitness me; not the professional me.

So, stick around if you are the kind of person that is capable of separating work and personal life. Otherwise, you can ignore this, pull out your phone, and check your work email right now. I’m sure your boss just sent you something that’s rather urgent. Better take care of that.

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I regret buying a BMW more with each passing day

There was a lot to love when I bought this car: Great handling, lots of power, very comfortable, and a boatload of high-tech features (e.g., a heads-up display, nav system, fancy seats). But, things started to go wrong towards the end of the warranty. Very expensive things.

That has been the biggest issue: Any repair on this beast is outrageously expensive. I would have been better off buying 3 cheaper cars and rotating them. The latest is a mysterious crack in the windshield. No rock chip. No obvious reason for it. Just appeared one morning. I haven’t even priced the replacement yet, but I can only imagine.

Never again.

Farewell Yahoo! The Time Has Come to Move On

As you may have heard through the grapevine, after 4 years of an incredible roller coaster ride with Yahoo, the time has come to move on to other opportunities. I am bootstrapping my own stealth (for now) startup. In parallel, today I’m launching a consulting practice to provide advisory services to other startups and more-established companies. After over 8 years in the big corporate worlds of Yahoo and eBay, I’m excited about taking everything I’ve learned from my experiences at those two great companies and returning to the entrepreneurial world.

Yahoo has amazing and loyal talent, and I am very proud of what my Search team accomplished over the past four years. I obviously cannot capture it all, but I wanted to share highlights of just a few great products they delivered:
• Relaunching Yahoo! Search in Oct 2007 with industry-leading Search Assist features
• Bringing structured data into Web Search for the first time with Y! SearchMonkey
• Opening up Search technology to the world like never before with the Yahoo! Search BOSS platform
• Bringing true applications to Search with Search Pad
• Launching an entirely new Y! Search experience again in Sep 2009
• Creating incredibly engaging Image and Video Search experiences
• Integrating Twitter and real-time content in Nov 2009
• An addictive entertainment Search experience that launched this March
• And finally, the truly fun Yahoo! Sketch-a-Search app on the iPhone
 
It has been a real pleasure to work with such a talented and passionate team. I’m going to miss everyone and I wish them the best of luck. Keep fighting the purple fight, guys!

– Larry

P.S. Now that I no longer have a free coffee bar, I had to undertake the arduous task of discovering all of the best coffee in the South Bay. Here is my list on Yelp. I work hard so you don’t have to. 😉

When Companies Behave Like Incumbent Politicians

I guess I shouldn’t be surprised, but it is disappointing when a company starts behaving like an incumbent politician. There are those who firmly believe that incumbents are heavily influenced by campaign contributors and special interest groups; often forgetting the needs of the constituents who they are truly supposed to represent. Similarly, there are established companies that lose focus on the very customers who made them successful. With their drive to maximize revenue and profitability, instead they find that slowly over the years they start spending more and more of their time catering to their advertisers. This is sadly ironic, given that those advertisers are only interested in the eyeballs and wallets of those very customers. Lose the audience, lose the advertisers.

Now, don’t get me wrong. I know that companies need to generate revenue to survive and thrive. I just believe that they should align their revenue models with the needs of their customers. In essence, happier customers should equal more revenue. Instead it seems that too many companies generate revenue by placing obstacles (i.e., often irrelevant ads) between users and their goals, hoping that they will click those ads along the way. They need to take a long, hard look at the performance of the advertising on their site, especially the traditional display CPM advertising. Would the click-through rate (CTR) on those ads be so low if they were really adding value to the experience, if they were truly targeted for the user, and if they were mapped more closely to what users are looking for? Please.

Performance-based advertising is certainly one way to improve the experience, since it is in the best interest of the publisher to target high-quality ads to the right user at the right time. And there has long been talk of Cost-per-Lead (CPL) and Cost-per-Action (CPA) slowly replacing CPM and CPC advertising. However, many feel that the pendulum swings way too far to the side of the advertiser with these models. In addition, the lower volume of campaigns and complexity of tracking and confirming transactions present challenges for both advertisers and publishers. A new hybrid model is in order for a better long-term solution, but it won’t happen overnight.

Dave McClure points out in this post that we’ve been living with this flawed model for too long (Caution: Rated TV-MA for strong language):

We have largely WASTED an entire web decade of time, energy & venture capital on extremely inefficient revenue models. There have been a few interesting examples of startups acquired in the 00’s for large amounts due to amazing growth (eGroups, MySpace, Skype, YouTube) or advertising potential (aQuantive, DoubleClick, AdMob, RightMedia). However, mostly the decade has been an uninterrupted string of uninspiring business models and small-time acquisitions of Web 2.0 startups filled with rainbows & unicorns, rather than those based on simple, transactional revenue models…. Gradually we are discovering that the default revenue model on the internet should probably be the simplest one — that is: basic transactions for physical or digital goods, and recurring transactions (aka subscriptions) for repeat usage.

So, certainly one path to increasing independence from this often unnatural relationship with advertising is to create and/or offer something of value that customers actually want to pay for. Wow. Imagine that. But, since the dependence on advertising revenue may never go away, we also need to invest in new marketplace models that incent both advertisers and publishers to truly cooperate to deliver high quality, highly-targeted, relevant advertising to consumers when and where it is appropriate, so that they knowingly engage and receive real value from what the advertising offers. Companies need to remember the fundamental reason they have achieved scale and success: Consumers choose to spend their increasingly precious time and dollars with them. The revenue they derive from selling that “attention” to advertisers can and will disappear if they forget that.

Predicting the Death of Big Entertainment Venues

Mountain Winery concerts in Saratoga, CAI have always loved live entertainment events. Concerts, comedians, music festivals; you name it. But, I have noticed an interesting shift over the past couple of years. I no longer have the patience for large venues. With the increasing quality of home entertainment systems and faster broadband pipelines, the entertainment decision is becoming harder. Do you go out for an event and endure skyrocketing ticket prices, challenging commutes and parking, standing in line, and crowded venues? Or, do you simply stay home and watch an event in HD with surround sound on the comfort of your living room couch?

Last summer, I visited the Mountain Winery in Saratoga, CA to see Brian Regan, one of my favorite comedians. The Mountain Winery is actually a pretty small venue, with incredible views of the Valley (image in this post). And, I had what I thought were pretty decent seats. But, I wasn’t in the first couple of rows directly in front of Brian. He’s a very physical comedian and I came to realize that a great deal of his impact is due to his facial expressions. I was far enough away and to the side that I really couldn’t see his expressions clearly enough. That made all the difference in the performance. After that disappointment, I decided that I would no longer go to large venues for comedy. Another one of my favorite comedians was in San Francisco recently. But, the venue was fairly large and I didn’t get tickets early enough to be in the front rows. So, I passed. Now, I won’t even bother going to a show unless I can get a great seat in a small venue. Just not worth the hassle.

Check out this Huffington Post article from Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts, where he shares his own concerns that live arts will become irrelevant:

For two tickets to an opera you can now buy a computer and watch Leontyne Price and Joan Sutherland on YouTube for free! No wonder so many people have stopped going to performances. A recent study by the NEA showed that a huge number of people are getting their arts exposure on-line and fewer are coming to the theater. No wonder so many arts organizations are suffering. Without audiences we receive no ticket revenue and the audience members we lose cease to donate as well. The claim that the arts are irrelevant is getting difficult to dispute.

A recent NY Times article also highlighted this issue, specifically referring to the financial troubles the Philadelphia Orchestra has been facing. And this isn’t unique. Several orchestras in the US are suffering in this economy.

And, it isn’t just the music industry. It is pretty clear from this LA Times article that sports has been taking a hit too:

Nearly every sport and sports team took hits, from layoffs to dips in ads, attendance and sponsorships. The Arena Football League canceled its 2009 season. The NHL’s Phoenix Coyotes filed for bankruptcy protection in May.

Several sports economists blame the downturn on a trend that started 20 years ago, when many major sports leagues shifted their focus from typical middle-class fans to corporations. That shift led to bigger stadiums and steady increases in prices all around to help pay for them.

Certainly part of the problem is the economy. It is hard to justify spending a lot of money on these events if your job is at risk or you’re struggling to cover the basics. But, part of this change is also due to a faster-moving shift to online entertainment. Improved systems performance, easier online transactions, micropayments, and the ability to interact and engage with others through social models have all created a more engaging and immersive experience. And, I think that is the key. There is a critical element here that is similar to the effect in really small entertainment venues:

You become part of the experience

You enjoy an interaction with the artist, the performer, and the other audience members that simply isn’t possible in large venues. In some sense, you are creating part of the experience yourself and that is where the new value will be created. As Max Levchin, CEO of Slide, stated in this recent Forbes interview:

The things of value inside these worlds have to be primarily created by the participants. That’s where our plans are. The real open question is whether these virtual worlds are a stepping stone between the shift from real economy to a completely virtual economy.

So, what are the venues going to do to survive? Basically, for large venues, they better start creating new and engaging experiences that offer much more than a consumer can get from the best high-speed, HD, surround-sound experience. Give us a reason to attend. Create an experience that we can only truly enjoy if we are physically there. And, instead of packing larger and larger audiences into mega-venues, I believe they should also focus on expanding into smaller, more intimate venues to acquire broader, more local audiences.

And, what are entertainers going to do? Some are already embracing the shift to online. Rather than bemoan the drops in attendance at physical venues and complaining about digital piracy, they are engaging with the game industry, social sites, etc. to weave themselves into new forms of performance art. And at least one orchestra that I know of is dynamically responding to these shifts in consumer behavior by providing a service where the audience becomes part of the experience. Literally. At a recent Yahoo! offsite, we had a surprise performance from a small orchestra that was seated amongst us. I have never enjoyed classical music in such an up close and personal experience before (well, not since when I used to play). Nothing like standing right next to talented musicians as they pour their souls into their instruments. That was indeed a transformational experience and they accomplished their goal of reminding all of us of the beauty of live music and pulling us back into an intimate venue and off our couches.

Are You Creating a Sanctuary for Your Customers?

Coffee Sanctuary in Caffee ReggioI dropped in on Barefoot Coffee yesterday to enjoy one of their fabulous Cubanos and noticed they had remodeled. It still feels cozy there, but it lost a bit of its independent spirit. I’m going to miss their quirky chairs. But, they still pull a great espresso drink and they still create nice latte art. And that, with a number of other touches, make Barefoot one of those sanctuaries that you seek out when you want a great cup of coffee that doesn’t come from the faceless corporate chains. I have a similar experience in one of my favorite dark little coffee houses in NYC, Caffe Reggio (image in this post). The funny thing is, I will go considerably out of my way to visit these places, when I could simply grab a drink at a place like Starbucks. Easy enough, since there is one within every quarter-mile radius.

Got me to thinking: How could this be extended to other products and services? Definitely easier with a local business, where you can create an atmosphere for your clients. Can also be more easily extended to services, where you can create that sense of comfort and trust through a personal connection. Much harder with other products and online services, but not impossible. Consider the latte art example. They don’t “need” to do that. It takes extra time. And they actually practice so that they can create some pretty incredible art and even enter competitions. It’s really about investing that extra time and, yes, costs to add delight and elegance to your product or service. Apple does it with their packaging and new buyers delight in the unpacking process. Heck, they even take photos and create videos of it to share.

Don’t you wish your customers did that? I’m sure you invest considerably in marketing and advertising, or you should be. Take some of that investment and roll it instead into making your product surprisingly delightful. Turn those customers into a grassroots channel whereby they are sharing their positive stories on Twitter and Facebook, uploading photos to Flickr, and sharing videos on YouTube.

The next time you’re streamlining and reducing costs, think really hard before you cut those delightful features and experiences or don’t even invest in them in the first place. View your product or service with “fresh eyes” or hire a research team to do it for you. Answer the really hard and sometimes intangible questions: Are you delivering delight? Do you add those extra touches that make someone smile? Are you creating a sanctuary from the chaos of your customers’ lives and the world around them, so that they feel comfort and pleasure in using your product or service? If you truly are, they are going to go considerably out of their way for you and pass right by your “Starbucks”, whoever that may be.