On Becoming a Thing

Last week it was announced that Gumroad just raised $7 million dollars from KPCB. Gumroad is based on the super simple concept of selling something with just a link. The concept is simple, almost too simple. Though it is potentially very powerful if it becomes the go to way to sell content on facebook and twitter.

When I met Sahil, the founder of Gumroad, 9 months ago one thing that stuck out was him saying that he thought Gumroad had the potential to become a thing. I was intrigued, usually people don’t talk this way about products. Plus he has a track record of working for startups that have become things: pinterest and Turntable.fm. Despite that track record it was difficult for me to understand how this simple concept would become a thing and also why gumroad would take off instead of an inevitable clone or even a preexisting competitor adding this feature.

When I heard the phrase “the potential to become a thing”, I immediately knew what he was referring to but I still have trouble defining it. Becoming a thing is about being the category killer but with a social cred twist.. Instagram became a thing for sharing photos, Kickstarter became a thing for social fundraising, path is on the verge of becoming a thing for sharing intimate moments of your life and Quora is becoming a thing for answering and asking questions. Becoming a thing comes from a combination of having a strong brand, a great user experience and powerful network effects when applicable. Becoming synonymous with the action that your site allows for is the culmination of becoming a thing. This is how startups are able to take off and become successful de facto monopolies.

Certain products become a thing because they are is so much better than the competitors. Google’s ascent to becoming the top search engine is a great example of this. They had an anti-marketing marketing style that became hip and a simplified user experience but where they really shined was in having search results that were much better than their competitors.

Instagram is an example of how having a great user experience and becoming cool can lead to a startup taking off. The company took off because it became a thing. It became cool to take and share photos with the service. Of course the great user experience was part of it and helped the initial spark. Though now, even if a competitor had the same or even a better user experience it’d just be called a clone and almost certainly couldn’t catch up. Using instagram is the modern day (or should I say retro) version of the kodak moment. Instagram says the service is about “a world more connected through photos” and I think the service gives users a photographer’s lens for viewing the world. Many of my friends excitedly say I have to “instagram this” when referring to taking mobile photos.

A thing can become a fad. Draw Something may end up being in this camp. It may endure with some level of popularity but certain things can have short life cycles, especially games. It is difficult to differentiate between what will last and what will fade. I think products that fulfill basic human needs will sustain while a lot of “non-franchise worthy” games will fade in popularity.

So how does a startup become a thing? That is a hard question and I don’t think there is a straightforward answer. Usually it can’t be predicted before hand. This is why some companies can shoot up in value so quickly once they find product-market fit. The following are areas that startups should focus on if they are hoping to become a thing:

1. Have well known founders and/or advisors.
2. Have a relentless focus on a great user experience.
3. Have a strong focus on marketing and building a brand. Recommended reading: The 22 Immutable Laws of Marketing
4. Have a deep understanding of human psychology
5. Have a focus on authentic growth (think Instagram versus socialcam)

The Internet is a Teleportation Device for Our Minds

Steve Jobs famously said that the computer “is the most remarkable tool that we have ever come up with and it is equivalent to a bicycle for our minds”. If a computer is a bicycle for the mind, what is the internet? A computer just makes the mind more powerful and enhances its memory. A lone computer gives humans tools: it can calculate quickly, store documents and files, help people do work more efficiently and be creative using a new medium. It was a great invention. Though the pre-internet computer era was before my time, I still understand and appreciate how powerful it was (even without being interconnected) in enhancing human abilities. To extend the metaphor though, a bicycle is great, but it is still limited by the input of the user. A computer enhances a persons capability but it is still limited to what that individual can input into a computer. It is still isolated.

The internet changed all of that. Now instead of being dependent on the capabilities of one computer, the whole world is now your tool. You can search the world’s information on Google. Ask the world a question (or a very small but interesting subset of it) on Quora. Share your thoughts on WordPress or Tumblr. Learn using Khan’s Academy, MIT OCW or Stanford’s new online courses. Information has finally become ubiquitous and free.

I want to say that the internet is the most remarkable tool that has ever been come up with an it is equivalent to a rocket ship teleportation device for our minds. Under a literal interpretation, Google maps can take us anywhere instantly. Though more interesting than physical geography, are the worlds of ideas and people. Virtually any piece of knowledge that is in the public domain can be accessed instantly. A connection can be made with any willing person. This democratized access to people and ideas is incredibly powerful. It is what is causing software to eat the world. This virtual teleportation ability has or will cause the disintermediation of most middle men. They will be replaced by centralized virtual hubs of activity in the areas of commerce, learning, social connection, music, wellness, entertainment and more.

Having access to a virtual teleportation device is wonderful, powerful and potentially dangerous. It lets people access what they want instantly and for free. Oftentimes this means content creators aren’t paid for their work and new addictions are created. Games, music and movies (all great things in moderation) win out over more productive pursuits. Addictiveness accelerates. Focusing becomes more difficult. Despite these drawbacks, the internet is still the greatest invention of all time in my mind. Teleport wisely, my friend.

The 1,000 Resume Problem

The most sought after job listings can get up to 1,000 resume submissions, especially in a down economy. How is a hiring manager or the future boss of said position supposed to sort through all of these applications? Some how the large stack of resumes have to be whittled down to 10-30 applicants to interview. Traditionally, this has been done by personal connections and the quality of an applicants CV. One’s web presence is quickly becoming an additional important factor, especially for tech related jobs.

It’s Who you Know

Having recommendation(s) from people that the hirer knows can go a long way. Even better if you have built a relationship directly with the person doing the hiring. That way, your resume will float to the top or you might even be able to know about the job opportunity before it is even public information so you won’t have to worry about being just another resume in the stack. As far as how to build a great network: check out the answers for this question on Quora and this video on networking. According to the U.S. Bureau of Labor, it is estimated that 50% or more of jobs are found through networking making it a much more important ability than just submitting your resume on job sites.

The Golden Pedigree

The standard method is to quickly filter through the applicants is by quickly sorting through the CVs and seeing who has the most shining resumes: who went to the best colleges while maintaining a high GPA and has worked at name brand employers. The thinking is, if they were good enough for HYPSM and [insert prestigious employer here], they must be good enough for me. This is the quickest proxy for identifying talented and hardworking individuals when you are faced with a flood of resumes. Yes, many great candidates are missed who don’t fit into the mold while some schmucks will still somehow be able to sneak in. Still this is the quickest and most efficient way to sort through a large stack of resumes and hence it is commonly utilized.

The perceived importance of having a golden pedigree has caused intense competition for getting into the nation’s top universities and for job slots with employers who are perceived as being prestigious. Sometimes students are willing to even take jobs that they hate in order to have amazing “exit opportunities”. I know students that have a great passion for finance or strategy consulting and that is great but by no means should other students feel pressured into pursuing those options. Plus for students that don’t fit the conventional mold, there has to be ways to build alternative credentials.

Your Web Presence is The New CV

Most likely a future potential employer will google your name/look for your web presence and whatever comes up will be used in evaluating you as a candidate. Some forward thinking companies such as Union Square Ventures have gone as far as only asking for an applicants web presence when applying for a position. The ability to write thoughtfully and passionately about a topic is a great way to demonstrate interest in an area. Also, your web presence is a great place to display qualities and accomplishments that don’t fit neatly on a resume and these are areas where you can really stick out. The importance of your web presence will only increase in value over time as it becomes a more integral portion of the hiring process.

In conclusion, I hope that one’s online presence and other alternative, non-exclusionary credentials help democratize the job application process. What skills you have learned and can display should be more important than one’s alma mater or there lack of. Despite that, I think which school you go to is becoming more important for most students because competition for good jobs is intensifying. That being said, for those with an entrepreneurial mindset, great things can be achieved and jobs can be found with or without such degrees. It will just be that much harder for those without the high-value formal credentials to fall back on.

How to Help People Connect?

Scott Adams, the creator of Dilbert and an interesting blogger shared a couple of clever business ideas around helping people easily create social plans. I think there is a major problem when it comes to how infrequently most people organize cool social events for their friends. These ideas could possibly help:

I’d also like to see a better evite system that allows people to move from conditional plans into something concrete. For example, I might want to go to dinner and a movie with friends IF I like the movie, and IF the timing is right, and IF they pick a good restaurant. My guess is that many people don’t bother making plans with friends because it’s too hard to negotiate all the preferences. No one enjoys putting out invitations and getting no takers. It’s hard to be the organizer.

I’d like the future evite system to start by figuring out who is around and who is up for what sorts of activities. Over time, the system would figure out the sorts of things you like and make suggestions to your circle of friends. Or perhaps you would keep a running profile of the new movies you’d like to see, the concerts you’d enjoy, and the restaurants you want to experience. The evite system would combine everyone’s general preferences into one or more specific plans for which you can opt in or out. And all along the process that might develop over the course of a week, each participant can “nudge” the plan in the direction he or she wants. The system might even negotiate potluck menus and help pick a home for get-togethers.

Looking at the sociology of Facebook it is evident that most people only socialize with a very small group of people. There is nothing inherently wrong with this—it is much more comfortable to do so—but I think a lot of people would like to socialize more and with more people but they don’t know how. Meetup.com is great for going to events organized around a particular interest. But what is there to help encourage social events among friends and acquaintances? Facebook is great for connecting with your friends online (and looking at a bunch of your friends photos) but the real-world events side is limited. Yes, it allows people to easily create events and distribute it to their social graph which I am sure encourages some social activity that wouldn’t have happened otherwise but I don’t think it is enough. I don’t know exactly what the solution to this problem will be but I think there will be a lot of interesting developments in this area in the coming decade.

Stake Your Digital Claim

Before the western frontier of the United States filled up settlers could go west and stake a claim. They could find a small piece of land and make it their own simply by staking their claim and depending on the current laws, doing something useful with the land. Unfortunately, that frontier has come to a close and there is no more unclaimed physical land left. Luckily, there is a new frontier, the world of information and ideas. Unlike land, there is an infinite amount of territory available. The modern day way of staking a claim is to a) become an expert in a topic, b) create a sticky message around the topic to mark the territory as your own and c) spread the message to make the territory valuable and your “ownership” known.

The first step is to gain expertise in some area. Of course some so called “thought leaders” try to skip this step and call themselves a leader of something or put themselves in front of a movement with no real credentials. While this strategy can work, it is disingenuous and it is better to develop an expertise before trying to become known as an expert. After deciding what area you want to focus on, delve deep into that area, reading a ton of material on the subject, working in the field and talking with and developing a relationship with experts in the field. If there are events focused on the topic, attend them. If not, organize events around the subject.

As you gain expertise, share your thoughts with the world by blogging, creating videos, writing a book, writing guest articles and whatever else. Make sure to put time into developing great content and make the content in such a way so that it is easy to spread and will remain fresh (evergreen content). Coining terms and creating a whole new terminology can be a useful differentiator and can help you “own” this new area. Tim Ferriss wasn’t the first to write about starting your own business and traveling, but he presented a new twist and a great overall package. He created a number of new terms “join the new rich”, “4-hour workweek”, “lifestyle design” and “geoarbitrage”  as part of his book. Tim really stepped it up from his old blog to his new one.

Of course it is much harder to stake a digital claim then it is to write about doing so. It takes a high level of commitment to become an expert in a field and then to create quality content around the subject matter. And you will have to keep with it even though it can take a long time to build an audience. There is an increasing amount of competition as more and more people are creating content in each niche. Though, with enough dedication and hustle, it is definitely possible.

Google to develop appliances that can autonomously cook food and clean dishes? (Pure Speculation)

Google has already developed self-driving cars which Larry Page foreshadowed to in his commencement speech that he gave in 2009 to The University of Michigan.

Many things that people labor hard to do now, like cooking, cleaning, and driving will require much less human time in the future. That is, if we “have a healthy disregard for the impossible” and actually build new solutions.

Is it possible that Larry Page was foreshadowing secret projects that Google is working on?Google has already developed self-driving cars which he foreshadowed to, so it may only be a matter of time before Google develops more crazy sci-fi inventions. I for one am looking forward to appliances that can autonomously cook my food and clean my dishes.

[youtube http://www.youtube.com/watch?v=qFb2rvmrahc&hl=en_US&feature=player_embedded&version=3]

Introducing a new Theory: The Recommendularity

The Singularity is the technological creation of smarter-than-human intelligence. I present something that is akin to this theory though on a much smaller scale: the recommendularity.

The Recommendularity is the technological creation of better-than-human intuition recommendations. By this, I mean that an advanced recommendation algorithm with sufficient data will be able to predict how a person will like something better than the person himself or herself.

In recent years the internet has seen a proliferation of recommendation engine based products:

• Music: Pandora
• Movies: Netflix
• Shopping: Amazon product recommendations
• Content: StumbleUpon

I greatly enjoy using each of these products along with millions of others. And the best thing is: the more that you use them the better they get.

Recently, something crazy happened. When it comes to movie recommendations, I now trust netflix more than my own intuition. The process has been slow and gradual. Overtime I have fed more film ratings into the system—now over 1,000. Also the netflix algorithm has been constantly improving during the same period of time.

Netflix, realizing the importance of the accuracy of their recommendations hosted a million dollar prize competition for who could improve their recommendation algorithm the most. Beyond this being a damn good publicity stunt and way to get more than their money’s worth of labor, this is just a hint to what may be in store.

As recommendation technologies improve and these technologies begin to have access to more and more data about us, the recommendations that they will be able to make will only improve.

It is too early to predict the nature and shape of this improvement curve.  On the top end it could follow an exponential improvement curve like Moore’s Law. On the opposite end, there could be a natural limitation to how good recommendation engines can get leading improvement to reach a screeching halt.

Even if there are limitations to how good the recommendation engines get, there is still a ton of room for growth in the amount of information that can be fed into a recommendation engine leading to great improvement in the results.

(This is where the SciFi part begins)

Where could this lead given enough time? (Hopefully, in our lifetimes)

Recommendation engines will be better than humans at making nearly any decision. People will rely on the personalized recommendations to make more and more decisions in their lives—anything from where to eat lunch, to where to go to college. Eventually even the the most important decisions in life could be left to an algorithm.

Ultimately, choice will remain with the individual but as the computer recommendations get better and better more and more weight will be placed upon a machines recommendation.

The recommendularity represents the ultimate discovery tool. It will help ensure that everyone gets everything out of the world that is best for them according to processing the preferences of people with similar interests.

Startup/Real World MBA Idea: Fantasy VC

(Photo: DavidDMuir)

I just read Tim Ferriss’ new blog post about creating your own Real-World MBA.   Basically Tim, took the $120k business school would have cost and put the money into a micro angel investing fund, the “Tim Ferriss Fund”. His primary objective was to learn from the experience and planned for the whole thing to be a sunk cost. I thought of an idea for those who don’t have $120,000 sitting around…

I was thinking it would be pretty cool if there was a fantasy version of angel investing just like there is for football and the stock market. Aspiring entrepreneurs and angel investors could try their hands at investing in a no risk manner. Certain fantasy investors who perform well might even be able to influence actual angel investors and VCs. A large part of the experience of angel investing couldn’t be recreated but at least some of it could and I think a lot of people could learn through the process.

What do you think of the idea? How could it be improved?

PS: It has been a while since I have blogged and I am not sure how often I will blog in the near future. Hopefully I will feel inspired often.

*  FYI, Tim wrote the 4 Hour Workweek and coined the term “lifestyle design” and discusses the benefits of optimization and outsourcing in business.