So far from the Valley (Silicon, that is)

Being so far away from Silicon Valley makes it hard to network out. It's a shame that some people won't network with someone solely based on the fact that they aren't in the "Valley" and can't make it to every tech conference for a face-to-face conversation... I've met some really cool people over the internet that I would consider to be "friends", even without ever meeting them. Talking via e-mail, AIM, or the phone is simply enough for me... In the age of telecommunication, does face-to-face conversations really matter all that much?

I'm not talking about an A-list celebrity or even a well known individual... It's usually the people who flaunt their LinkedIn profile with +500 connections but can't add someone because they haven't sat down and had coffee at the local Startbucks. I'm sorry, but I would never meet a random person without at least connecting with them at some level, be it phone, e-mail, or blogs.

I guess the world will remain small for some people... It really is a shame.

EDIT: I just want to add that this isn't directed towards anyone in particular... This is a general rant about the problems of connecting to people far away. If you live outside the Valley, you know what I mean.

Traction Gainers

Success takes a while. While we haven't exactly launched yet, I can already tell that it will take at least 12 months to get decent traction. In the case of StubHub.com, it took nearly three years... Etsy.com did it much faster, in as little as 12 to 18 months. So why was StubHub.com a good acquisition candidate for eBay? Perhaps StubHub's lifespan was a deciding factor - they've been around for a while and have proven that they're not going to disappear anytime soon. If I recall correctly, StubHub's revenue numbers are less than impressive... So I doubt that's a deciding factor.

However, Etsy's traffic is quite solid and their growth is what I consider to be borderline explosive. Is this a result of VC funding? Is this a result of the tight-knit community surrounding Arts & Crafts? It's no secret that Etsy.com is catering to a rather niche market with a hard demographic to appeal to on the internet, especially when going up against eBay. In my opinion, Etsy.com is clearly more valuable than StubHub in terms of growth and community; I can't say much for their revenue numbers, but I'm sure they are making out pretty good.

It's quite ignorant to expect your startup to open it's doors and sustain a topped out spike on the Alexa charts - it's just not going to happen. The big questions are - how does a startup maintain that growth? How does a startup market their service on a shoestring budget? Virility is one answer (ex: YouTube, MySpace), but there are tons of businesses that won't or can't get the virility that those services have seen (ex: 37Signals, Zoho). I'm going to think about this more and post another blog entry on how I believe marketing could be done on a shoestring.

Slashdotters show Compassion (at least some of them do)

Jim Cray of Microsoft has gone missing... See Slashdotters respond.

The story broke (for me anyway) over on Robert Scoble's blog

It really irritates me that people can't set aside their differences when it comes to someone in trouble. Seriously, is it a joke that someone's friend or family member is missing or possibly dead? I don't think it is, but it seems like several Slashdotters do. Even among the mountains of bad apples, there are still some awesome users on Slashdot that can show compassion. Slashdot is an awesome service, but I sometimes wonder about a few of their readers...

User Registration

Guy Kawasaki blogged about the top ten barriers to user adoption... The number one barrier? User registration. Hopefully this isn't too much of an issue. Users will most likely need to register with our service in order to use it, but it's going to be simple - an e-mail address and password. It will be part of the listing creation process, and hopefully take only a few seconds.

I don't really see simple registration as a barrier... In fact, it would help greatly to weed out the users that aren't really interested in the system, or those who like to spam. If someone really wants to use the service, taking 3-5 seconds to enter an e-mail address and password really isn't that big of a deal IMO. If users can't do that, then perhaps the service is never meant to be.

Why a niche market?

If the UI is awesome, why choose a niche market when you can go for the whole cake? Because niche markets can grow into large markets... And why would you want to start out in direct competition with someone? Our whole premise is that wanted ads can be applied to a market in order to create a more efficient marketplace.

If we break down the current "wanted-ads" niche, there are roughly 1-2 million listings per year. That may be from individual people, or dedicated users - it's simply hard to gauge with the lack of dedicated services. I think the market potential is much larger than that.

For starters, I think the existing wanted-ad-solutions are rather obscure and under-explored, so the numbers could already be on the low end. The people that are most likely to post a wanted ad are those who 1) know what they want and don't feel like searching, 2) are seeking items that are hard to find, and 3) want sellers to compete on price and cater to the them.

Doing a quick survey, half of the people I surveyed fit any combination of those three stereotypes above. Even if the numbers aren't that good, you're still probably talking about a solid 5% of the buyers that use eBay. That doesn't really translate into revenue amounts, but I'm sure it would be at or below eBay's revenue-per-listing, since we'll likely be going with a CPA type of model.

Simplicity is the Key

When it comes to new services, simplicity is one of the major keys to success. People switched to Google because it was easier - it shaped itself around the search bar; not banner ads, media content, or hidden sponsored URL links. Part of the success that 37Signals has is a direct result of their service being so simple. What would their initial growth look like if they came out with all of the features they have now? Most people wouldn't have known how to react to all the tools - it would have overwhelmed them.

It doesn't matter what your business is - keep it simple, stupid. Whether you're a search engine, an enterprise software startup, or someone focusing on a niche market - keep it simple. The faster your users can get in, do what they need, and leave - the better. In fact, I think I'm going to make speed our number one priority. If a user can't do X action in Y amount of time, something needs to change.

Another killer of simplicity is feature creep... That is, when a service adds too many features too quickly, complicating the user interface AND development. We're picking an easy solution for that problem - we're only going to focus on the core niche and create a site with one feature. Think of eBay - they started with the simple auction listing - nothing more. More advanced features can be integrated if the service gains popularity - otherwise, who needs advanced features without users?

E-mail is Broken

In my opinion, e-mail is a broken method of contact. Most people claim to receive hundreds (or even thousands) of e-mail messages per day. There's no reason to doubt that claim, and that volume of e-mail is certainly inefficient. However, I believe e-mail can be fixed... Throw in some tagging, build priorities based on your network of people, and you now have a way to quickly sort through the noise. Is that too much to ask? It sure seems like it - most e-mail is categorized by the time received with no regards as to who sent it, what the e-mail contains, or any other important attributes. Here's how my hypothetical system would work;

Receiving e-mail:

1. Upload my e-mail address book (or LinkedIn connections list)
   
2. Assign those individuals a priority
3. Create a list of tag priorities
4. Received e-mail is categorized by tag(priority) + sender(priority)
   

Sending e-mail:

1. Compose an e-mail and tag it
2. When the user receives the e-mail, it is prioritized by tag(priority) + sender(priority)
3. If I'm a high priority person, and the tags I used are high priority, then I'll be at the top
   

Will future versions of Outlook Express or GMail solve these issues? It's unlikely - and until then, it will be a pain in the ass to try and network for us non-Siliconites.

How does this affect me personally? I'm the one who wants to try and get in touch with people and network myself outward. It's kind of hard to do that when you're under a thousand other messages. So far, I have a pretty good network; it's still hard to get in touch with some of the people, but not impossible. I look forward to expanding my network over the coming months, and hopefully longer. I have family near Silicon Valley, so it's not out of the realm of possibility that I could make an appearance.

Consumer-driven Commerce

As a seller on eBay, what always gets me is that the market is driven by the sellers. That's a good channel of distribution for new products that consumers might not otherwise know about; On the other hand, there are also sellers trying to sell products that nobody wants, or products that have a very low demand. That's bad for both sellers AND buyers; sellers lose money, and buyers have to push through a ton of noise to find their signal.

What's the solution? A marketplace driven by buyers. This ensures that the amount of products never exceeds the consumer demand - less noise and a lot more signal (or perhaps ALL signal). It ensures that sellers find their target audience and don't waste money on distribution channels that won't work. Everyone gets what they want.

Isn't market X already serviced by company Y?

I like this question, especially when it comes to defining niche markets. The answer is almost always "yes" - there isn't a market uncovered:

1. When eBay started back in the mid 1990's, their market was covered by garage sales and flea markets.
2. When Google started, their market was covered by many competitors.
3. The online advertising market existed before Google - why did they choose that business model?
   
4. When MySpace entered the picture, their market was already covered by Friendster.
5. When Amazon opened it's virtual doors, their market was already covered by retailers
6. StubHub is in the market of P2P ticket sales - eBay has that category and covers that market.

And my favorite example is Etsy. Their market (Arts and Crafts) is definitely covered (and extensively) by eBay. Even with Arts and Crafts being extensively covered, eBay still has a hard time doing it well. A service that focuses on one niche is always better than a service that does it all. The one good thing that eBay does well is that it does a little bit of everything - On the flip side, niche companies do a whole lot of one thing and can be pretty damn successful at it.

The only time I would be afraid is if a market isn't serviced by anyone. There's a reason it's not being served.

How does this apply to Wantsy?

Craigslist (and a few others) already service the wanted ads market. But what good is it to the users when the majority of the traffic isn't going to those wanted ads? Wanted ads, like all other listings, need to be sub-divided into categories themselves; something not done on ANY other site at this time. Instead, wanted ads are their own category with nothing below. There is so much potential with wanted ads, and I definitely don't want to see it wasted.

UI Layout (and market woes)

I've got the majority of the hand-drawn UI layouts uploaded to Basecamp. The usability seems pretty simple - speed is the key. The good news is that if we need to switch markets for some reason, it could be done rather easily. Depending on the market, the categorization system would need to be modified.

I'm not going to lie - I'm still somewhat worried about the market. Why would a user post a wanted ad when they can just as easily go to eBay and find the item there? Even while asking that question, there are millions of wanted ads posted each year on other non-exclusive sites. I know the market is there - I just don't understand it. Here are a few reasons why a buyer might want to post a wanted ad:

1. Item customized exactly to the buyers wants
2. A "set it and forget it" mentality - don't worry about someone outbidding you
3. Sellers bidding to give you the lowest price

Here are some reasons why a seller would enjoy wanted ads (no question there):

1. Ability to immediately find people interested in your item (perhaps even automatically)
   
2. Ability to undercut the competition
3. Cost per acquisition - no sale means no cost
   

Market Focus

This is an area that I'm still having trouble with. It's pretty difficult when you have an idea that is workable in more than one market - which one do you choose?

The "Wantsy" concept is similar to "wanted ads". A user posts what they "want" and someone else provides it. If you have a system where the seller's offers are visible, it creates a reverse-auction setup with sellers trying to bid lower than the other. That's it - it's a simple concept, yet it seems so unexplored. Sure you can find it on a classifieds site, but the concept is really underdeveloped with little focus. There isn't a dedicated solution for users "wanting" things.

Which market should this be applied to? The existing wanted ads market? The real-estate market? The advertising market?

Existing wanted ads market:

There are over 1 million wanted ads posted to Craigslist each year. The focus on Craigslist simply isn't there - you're stuck locally, categories are non-existent, and there's not attempt at a reverse-auction setting. If you make wanted ads the "meat" of the site and focus only on that aspect, I think you could win over a lot of wanted-ad-users.

Real-estate market:

A decent percentage of wanted ads are comprised of people seeking "real-estate". This is technically included in the above market, but I'm not sure whether it should be the sole focus. Servicing a clear niche market like real-estate (on it's own) would make marketing a lot easier.

The advertising market:

The advertising market is covered well by services like AdBrite, but what if the model is flipped? What if it's the advertisers that list their need, and the advertising distributors that seek out the advertisers? It's typically the other way around. As a website owner, I would love to see who's interested in advertising on my site. As an advertiser, I would love to have distributors bid down on my costs - besides, advertising isn't an "impulse" item.

YouTube for Music

Just a personal blog entry - I might mix these in time from time.

I'm a pretty big fan of YouTube. My belief is that they wouldn't be where they are now if it wasn't for all of the copyrighted content. Since the acquisition, I'm not so sure that the copyrighted content is a big deal now - Google has been making it a point to pay the major studios in order to show their work.

What do I use YouTube for? Music. My "favorites" list is over 5 pages long, filled with music videos of my favorite songs. In fact, I hardly open my iTunes or Media Player anymore - I just log in to YouTube and startup the songs that I like. I'm going to continue working through my playlists and in an attempt to find even more music on YouTube.

Categorization

How can a service make "categories" successful while giving the user complete control?

Tagging is one possibility, but it has to be done right. Tags have the ability to make or break a service - too much tagging without boundaries leads to mass disorganization. Tagging with too many boundaries, on the other hand, is essentially the same as having hard-coded categories.

Why give the users the power to create their own categories? So that they can take the service in any direction they want - a niche market decided by the people. Instead of forcing the users to a specific niche, we will let them decide what's best for themselves. Hopefully we can do this without making things too complicated, and hopefully users will understand that democracy of a service means they truly can do anything.

Let's think of eBay - what would happen if their system had revolved around the use of tags instead of hard-coded categories? Well, it's pretty hard to say because they are so successful at this point. I'm willing to bet that they would have achieved the same success, but perhaps more user satisfaction? Perhaps they would have been able to cater to sub-markets like Arts & Crafts much faster?

Who knows, but one thing is for sure - If tagging is done right, it can completely replace the search query and make sure only the most active topics flourish. Too many categories and not enough action can really make a service look drab.

What have we accomplished?

So far, we have settled on the business model, market sector, secured the domain, and defined a few basic features.

What do we need to do? Continue defining more features while avoiding feature creep. We could then move on to the actual UI and layout, including a logo. After that, we would need to define a clear marketing strategy.

Am I worried? Not much. The service fills an existing need while having the potential of tapping into a much larger market - if you can make people happy, you're going to win. So, what's that little bit of worry left? Marketing. I don't care if a business has the answer to a "need" shared by the entire United States - if people don't know about it, they can't use it.

This is my first post

I figured I would start this blog to outline what's happening with the latest venture - Wantsy. I'll try my best to outline everything from features to what's going on internally, while trying not to give too much away ;-)