Friday, February 14, 2014

Startups Are A Numbers Game, But Use Your Good Sense

One of the expressions I hear a lot in the startup world (and which I even use from time to time) is "it's a numbers game."

What the speaker means is that in certain activities, such as selling a product, pitching a VC, or asking a woman out, failure is the most likely result, and that the only way to successfully achieve the desired outcome is to be persistent and make multiple attempts in the face of rejection.

This is good advice, but it's critical that we treat the "numbers game" as a heuristic, not a physical law.

In general, persistence improves your chances of success.  But that doesn't excuse you from using your good sense.

For example, heterosexual men have to learn to deal with rejection; the majority of the time that a man asks a woman out, she's going to turn him down.  Or at least, that was my experience when I was young and single!

A man who gives up on dating after a single rejection is likely to remain a lonely Hacker News reader (I kid! I kid!).  You have to keep risking rejection if you want to find a woman who is actually interested.

On the other hand, a broke, ugly, unknown man who insists on asking out wealthy supermodels will never get what he wants, regardless of how many of them he approaches (and gets slapped by).  Even the supposedly ugly men who have landed supermodel wives (Billy Joel and Ric Ocasek come to mind for me, which shows you that I've reached geezerhood) are rich and famous, which is apparently more than enough to offset being ugly.

If you want to figure out if the "numbers game" principle applies, just use math.  If you have a one in 10 chance of success, and you make six attempts, you have a better than 50/50 chance of being successful at least once.  If you have a 1 in a million chance of success, your chances after six attempts are better, but are still just 6 in a million.

Tuesday, February 11, 2014

Do You Have A Relationship With Your Users?

I was fascinated by a recent report that Upworthy, Elite Daily, and Distractify--buzz-based content repurposers whose "viral" headlines have plagued my Facebook feed--had seen their traffic drop by 50% after Facebook changed its news feed algorithm:

The rapid decline of these previous "hot" startups illustrates a basic principle of business.  You have to ask yourself, "Do you have a relationship with your users?"

Search and social are the biggest drivers of growth on the Internet.  But if you rely on search and social to provide your users, you put yourself at the mercy of Google and Facebook.  (I don't lump Twitter in because Twitter acts more like a neutral third party--you see the tweets of people you follow, and Twitter only adds editorial suggestions on the margins.  In contrast, Google's search results and Facebook's News Feed are totally curated...I can't even figure out how to see a full list of Facebook updates from my friends, a la Twitter.)

Just consider the wails of despair every time Google updates its search algorithms, or hands out the "death penalty" to companies like Rap Genius that try to game the system:

Sure, Google relented, but I think it's pretty clear who has the power in that relationship.

Jonah Peretti of Buzzfeed argues that Facebook is like a cable company, which can decide which channels to carry.  This strikes me as a reasonable analogy, but it overlooks the most dominant force in television: ESPN.

When it comes to the cable companies, ESPN holds the cards.  Because of the relationship ESPN has with its viewers (specifically men), no cable company in America can afford to not carry the channel.  As a result, ESPN can charge $5 per month for every cable subscriber in the country, whether or not those people ever watch it.

ESPN has the loyalty of its users, which allows it to dictate terms that every other cable channel envys.  If Facebook decided to give Upworthy the death penalty tomorrow, few Facebook users would care.  I would welcome that move.  But if any cable company tried to drop ESPN, it would be burned to the ground.

Search and social are the key to organic, cost-effective growth for startups.  But make sure you develop a real relationship with those users, or your business model will only work as long as Google and Facebook deign to let you live.

Two-Face Productivity

Most of us have a problem with procrastination.  I could certainly argue (with real justification) that a majority of Facebook and Twitter's usage occurs when people are procrastinating.

Despite my wide array of productivity techniques, even I find myself procrastinating.  Ironically, one of the main reasons I end up procrastinating is because I have trouble resolving the inherent conflicts within those systems.

For example, I like to have prioritized lists of things that need to happen.  But the issue is, there is never a simple priority.  As Stephen Covey pointed out, both urgency and importance matter.  A particular task might not be as important, but as its deadline draws near, it gains in importance.

The problem gets worse with large and indeterminate tasks like "catching up on email" or "writing blog posts."  Neither is necessarily more important than the other, and their relative priority flip flops depending on how much I've worked on them lately.

This morning, I had a pretty clear priority to either read email or write a blog post, yet I found myself spending about 5 minutes on the highly-addictive because I couldn't decide which to do.

That's where Two-Face* productivity comes in.  When faced with multiple tasks of roughly the same priority, the best technique is simply to choose one at random and start working.  This blog post, for example, won the coin toss.

The reasons Two-Face productivity works is that the choice doesn't really matter--that's why it's so hard to make; you can't tell which choice is better.  Rather than wasting time trying to logic your way to a decision (wasted time) or goofing off (really wasted time), a simple coin flip** or other arbitrary choice can cut the Gordian knot.

* Two-Face is the Batman villain who flips a coin to make decisions.  I'm sure he has a much more depth to his characterization than that, but that's all I can remember from "The Dark Knight."

** If you really want to get geeky, you can also use D&D style dice for deciding between multiple options.  As I recall from my childhood dice set, the standard D&D set comes with 4-sided, 6-sided, 8-sided, 10-sided, 12-sided, and 20-sided dice.  For extra geekiness, you can roll a 10-sided die twice to get a random number between 1 and 100.