By Martin Carstens
Sometimes it just so happens that a new technology service really speaks to you. The first time I saw Groupon, I thought that it was one of the most compelling services seen in quite some time. Clearly I was not the only one. Google is rumoured to have made an offer to acquire Groupon for US$3-billion. My first look at Evly however did not elicit quite the same initial reaction.The crowdsourcing social network had a soft launch this month. Its founder, Eran Eyal, of Springleap fame, touted their efforts as cutting-edge and having the potential to revolutionise the internet. Based on mathematical models for businesses with viral loops, he ambitiously described a scenario that could see Evly amass “over 36-million users in its first 18 months”. If this came true, it would easily make it the fastest growing website on the African continent. Some have rightly pointed out that Eyal and his business partner Eric Edelstein have had local success over the last three years via their T-Shirt crowdsourcing startup, Springleap. Based on the popular Threadless, Springleap’s local focus sees the company using 3 500 artists who form a part of a community of about 25 000 subscribers. That’s great, but its a rather long way off from 36-million users. It may not be wise to take the success of Springleap to predict Evly’s fate. There is no doubt that Eyal and Edelstein are savvy entrepreneurs, but can taking the Springleap crowdsourcing model and handing the keys to the public really produce similar success stories? With Evly, the idea is to give anyone the ability to create initiatives based on crowdsourcing. I wouldn’t be surprised if someone attempted to create another version of Springleap using Evly, but success depends largely on the people driving the initiatives and not necessarily the tools they use to build them.
Hands-on with Evly’s site building tool Evly’s site-building tool is at the heart of the service, allowing businesses and individuals to source input from the members that become part of their social network. Very simply put, you can think of the tool as a Ning social network, with a Q&A element added to it. You start by choosing from a list of pre-defined themes. Next is the most critical part: You are presented with a list of templates. Depending on the template you choose, your Evly social network will have a certain design to facilitate the particular crowdsourcing input you are looking for. The templates currently available are “Ideas”, “Answers”, “Solutions”, “Designs”, “Advice”, and “People”, with “Money” shortly to follow.
If none of these templates are useful, you are also free to create your own using the “Custom” option — for example, if you’d like to source friends for a party you’re having.
Each of the templates have more fine-grained setup options. If you choose the “People” template you can select to source people for business, projects or research. If you choose the “Designs” template, you can select to source designs for business, projects or products.
To Learn More Click Here
Showing posts with label threadless. Show all posts
Showing posts with label threadless. Show all posts
Tuesday, November 30, 2010
Friday, November 26, 2010
How Threadless plugged into Facebook with 190,563 fans
Threadless Weaves its Awesome Customer Support Experience Directly into Facebook, Providing a Smoother and More Interactive Customer Experience
New Support Access Powered by Parature for Facebook™, the Industry’s First and Only Social Support Application for Directly Engaging Customers and Fans through Facebook
Chicago, IL and Vienna, VA (Vocus) November 18, 2010
Threadless.com, a community-driven online design platform for retail, and Parature, a global leader in Web-based customer service software, today announced Threadless has extended its customer support and service experience by directly integrating support into the world’s most popular social network, Facebook. The new support service can be accessed at Threadless’s Facebook Page, and is powered by the first and only social support application for directly engaging customers and fans through Facebook, Parature for Facebook™.
Customers and Threadless’s more than 180,000 Facebook Fans are now able to rapidly resolve support issues by simply clicking on a Support Tab from the Threadless Facebook Page. Fans and Customers can now:
Search a knowledgebase of frequently encountered issues and resolve support issues quickly and independently;
Submit a trouble ticket if unable to resolve a support issue; and,
Post comments on the Threadless.com Facebook Page and receive an individualized response rapidly.
Threadless is known globally for its pioneering approach to crowdsourcing and social media innovation, focusing its business on helping customers build social art and design communities that make the creative and fashion design experience more collaborative, fun and enjoyable. Providing integrated support with Facebook is another crucial step in Threadless’s evolution as a social media innovator.
"We are really excited to extend our support experience to our growing community of fans and customers through Parature for Facebook,” said Brianne Hattaway, Director of Customer Support for Threadless. "Threadless's approach to support is shaped by our online community and their need for transparency and immediacy. We can reach out to our customers on Facebook even more than before and give them a fluid support experience across different channels with the same rich FAQs and personalized support that Parature enables on our site."
“In today’s increasingly social and collaborative world, customers demand support when and how they want it,” said Parature Founder and Chief Strategy Officer, Duke Chung. “With over 500 million members at last count, and recently surpassing Google as the most visited site in the United States, according to HitWise, companies are compelled to provide direct and real-time support, sales and service through Facebook. Parature for Facebook enables them to do just that.”
Parature for Facebook is the industry’s first and only customer support application for directly engaging customers and fans through Facebook and is delivered through the cloud and charged by subscription. Customers can monitor Facebook Wall conversations, posts and comments in real time, appropriately route, respond and report on social interactions, gaining an enhanced view of customer engagement and support effectiveness. With Parature for Facebook, corporate Facebook fans can search knowledgebases, submit tickets and chat directly with customer success agents without leaving Facebook. Demos are available for viewing at http://www.parature.com/res_demos.aspx
Parature for Facebook can be purchased as a stand-alone application or as part of the Parature Customer Service software suite.
Threadless.com
Founded in 2000 by entrepreneur Jake Nickell, Threadless has evolved from an online t-shirt design company into an international community-driven design platform featuring merchandise designed by and for its fan-base of nearly one million users. Considered the "poster child" of crowdsourcing, Threadless boasts a diverse community of designers, artists and general consumers from around the world who submit and vote on designs for ongoing competitions. Winning designs are produced and available for sale at Threadless retail locations and online store, and the winning designers receive $2,000 plus a $500 gift certificate. Threadless integrates its passionate, authentic and highly active community into every aspect of its business and continues to offer them new design opportunities through strategic partnerships with major brands including Disney, Dell, Griffin and Havaianas.
Parature, Inc.
Parature enables organizations to better serve, support, engage with and retain their customers via the Web. Industry-leading, Web-based Parature Customer Service™ software provides customer service organizations with a comprehensive, multi-channel way to meet the growing expectations of their customers. With more than 10 years experience, Parature serves organizations in a wide variety of industries worldwide and helps support nearly 20 million end users. Parature is among Inc. Magazine’s Top 100 Fastest Growing Private Software Companies and is the recipient of numerous product, technology, and leadership awards. Today, the Parature name is synonymous with innovation and value in Web-based customer service software, strategies and best practices. Parature is headquartered in Vienna, Virginia with offices in San Francisco and the U.K. For more information, visit http://www.parature.com or follow @parature on Twitter.
To Learn More Click Here
New Support Access Powered by Parature for Facebook™, the Industry’s First and Only Social Support Application for Directly Engaging Customers and Fans through Facebook
Chicago, IL and Vienna, VA (Vocus) November 18, 2010
Threadless.com, a community-driven online design platform for retail, and Parature, a global leader in Web-based customer service software, today announced Threadless has extended its customer support and service experience by directly integrating support into the world’s most popular social network, Facebook. The new support service can be accessed at Threadless’s Facebook Page, and is powered by the first and only social support application for directly engaging customers and fans through Facebook, Parature for Facebook™.
Customers and Threadless’s more than 180,000 Facebook Fans are now able to rapidly resolve support issues by simply clicking on a Support Tab from the Threadless Facebook Page. Fans and Customers can now:
Search a knowledgebase of frequently encountered issues and resolve support issues quickly and independently;
Submit a trouble ticket if unable to resolve a support issue; and,
Post comments on the Threadless.com Facebook Page and receive an individualized response rapidly.
Threadless is known globally for its pioneering approach to crowdsourcing and social media innovation, focusing its business on helping customers build social art and design communities that make the creative and fashion design experience more collaborative, fun and enjoyable. Providing integrated support with Facebook is another crucial step in Threadless’s evolution as a social media innovator.
"We are really excited to extend our support experience to our growing community of fans and customers through Parature for Facebook,” said Brianne Hattaway, Director of Customer Support for Threadless. "Threadless's approach to support is shaped by our online community and their need for transparency and immediacy. We can reach out to our customers on Facebook even more than before and give them a fluid support experience across different channels with the same rich FAQs and personalized support that Parature enables on our site."
“In today’s increasingly social and collaborative world, customers demand support when and how they want it,” said Parature Founder and Chief Strategy Officer, Duke Chung. “With over 500 million members at last count, and recently surpassing Google as the most visited site in the United States, according to HitWise, companies are compelled to provide direct and real-time support, sales and service through Facebook. Parature for Facebook enables them to do just that.”
Parature for Facebook is the industry’s first and only customer support application for directly engaging customers and fans through Facebook and is delivered through the cloud and charged by subscription. Customers can monitor Facebook Wall conversations, posts and comments in real time, appropriately route, respond and report on social interactions, gaining an enhanced view of customer engagement and support effectiveness. With Parature for Facebook, corporate Facebook fans can search knowledgebases, submit tickets and chat directly with customer success agents without leaving Facebook. Demos are available for viewing at http://www.parature.com/res_demos.aspx
Parature for Facebook can be purchased as a stand-alone application or as part of the Parature Customer Service software suite.
Threadless.com
Founded in 2000 by entrepreneur Jake Nickell, Threadless has evolved from an online t-shirt design company into an international community-driven design platform featuring merchandise designed by and for its fan-base of nearly one million users. Considered the "poster child" of crowdsourcing, Threadless boasts a diverse community of designers, artists and general consumers from around the world who submit and vote on designs for ongoing competitions. Winning designs are produced and available for sale at Threadless retail locations and online store, and the winning designers receive $2,000 plus a $500 gift certificate. Threadless integrates its passionate, authentic and highly active community into every aspect of its business and continues to offer them new design opportunities through strategic partnerships with major brands including Disney, Dell, Griffin and Havaianas.
Parature, Inc.
Parature enables organizations to better serve, support, engage with and retain their customers via the Web. Industry-leading, Web-based Parature Customer Service™ software provides customer service organizations with a comprehensive, multi-channel way to meet the growing expectations of their customers. With more than 10 years experience, Parature serves organizations in a wide variety of industries worldwide and helps support nearly 20 million end users. Parature is among Inc. Magazine’s Top 100 Fastest Growing Private Software Companies and is the recipient of numerous product, technology, and leadership awards. Today, the Parature name is synonymous with innovation and value in Web-based customer service software, strategies and best practices. Parature is headquartered in Vienna, Virginia with offices in San Francisco and the U.K. For more information, visit http://www.parature.com or follow @parature on Twitter.
To Learn More Click Here
Saturday, August 14, 2010
Hipster Fashion Line Rides Crowd Sourcing To Business Success
Jake Nickell, founder of Chicago-based Threadless.com t-shirts, had no intention of turning his hobby into a career. But after three years of running an Internet-based clothing company, Nickell soon realized that he had the chance to transform something he loved doing into his job, He hasn’t looked back since.
Over the last decade, Threadless has grown from an art school project run out of Nickell’s home in Chicago into a crowd sourcing pioneer, with 75 employees and a brand that has become an iconic name in casual fashion.
“It was initially a hobby. It was never intended to be a business,” Nickell said. “We just want to be the awesomest [sic] place for people to hang out. We don’t think of it so much as selling t-shirts, but as a place to hang out and make art.”
Unlike old-school art “happenings” that took places in artists’ studios, warehouse space or industrial districts, this one, until recently, resided exclusively on the Internet.
Art and commerce
From day one, Nickell established a business model that encouraged artistic expression. Designers post their t-shirt concepts to the Threadless website, where an active and critical community rates the picture. Threadless then prints the highest rated designs onto t-shirts available for purchase on the website.
Despite the system leading to millions of shirts sold every year, Nickell didn’t initially intend to make money from his project. Since it’s inception, Nickell has had only two goals for the business: Provide artists with an outlet where they can simultaneously distribute their work and make money, and give wearers a voice in which designs get produced..
“I think my lack of understanding of traditional business stuff has actually helped us. It has been really helpful for our corporate culture,” Nickell said. “Even today, a lot of our decisions about doing stuff are based on how cool it would be.”
The artists receive $2,500 if their design makes it onto a shirt and another $500 if popular demand leads to a reprint of the shirt after the initial run. In recent years, Threadless has moved beyond t-shirts, printing the designs on everything from water bottles to iPod cases. If an artist makes it onto one of those other items, they also receive $500.
That high fee comes from Nickell’s respect for the artists, and many designs never make the company any profit at all.
“Because our award is so generous, many designs never recoup their costs,” Nickell said. “However, we strongly believe in a model that equally rewards all printed artists for the first printing of a tee. This contributes strongly to the ‘all for one and one for all’ spirit of our community.”
Crowd sourced success
By tapping into a community of artists to design the products, and a community of fans to vet them, Threadless became one of the first companies to take advantage of an Internet business model now called crowd sourcing. However, Threadless’ model predates the coining of that phrase by four years, and Nickell hates the term.
“I don’t like [the term] crowd sourcing. It seems sterile and one sided, like a company needs something and goes to the crowd to do it for them,” Nickell said. “We’re more passion-based. We see people doing these awesome things, and we want to help them with it.”
To emphasize that connection with its artists and its customers, Threadless is going on tour this summer. Nickell has transformed a camper trailer into a mobile store that will drive across the U.S., giving customers and artists a chance to meet each other and the company’s employees.
Similarly, in 2007, Threadless opened a brick-and-mortar store in Chicago. Even though the store is far less profitable than the website, it grows the brand as a community center and venue for t-shirt and art classes, Nickell said.
Deliberately opening a store destined to be less successful than a profitable website might seem like a step backward to most business owners, but that move is yet another example of how Threadless has succeeded by putting art first and money second.
“If I had to give up one thing, it would be the money I made from this, because the relationships I’ve made with artists is so valuable,” Nickell said.
To Learn More click Here
Over the last decade, Threadless has grown from an art school project run out of Nickell’s home in Chicago into a crowd sourcing pioneer, with 75 employees and a brand that has become an iconic name in casual fashion.
“It was initially a hobby. It was never intended to be a business,” Nickell said. “We just want to be the awesomest [sic] place for people to hang out. We don’t think of it so much as selling t-shirts, but as a place to hang out and make art.”
Unlike old-school art “happenings” that took places in artists’ studios, warehouse space or industrial districts, this one, until recently, resided exclusively on the Internet.
Art and commerce
From day one, Nickell established a business model that encouraged artistic expression. Designers post their t-shirt concepts to the Threadless website, where an active and critical community rates the picture. Threadless then prints the highest rated designs onto t-shirts available for purchase on the website.
Despite the system leading to millions of shirts sold every year, Nickell didn’t initially intend to make money from his project. Since it’s inception, Nickell has had only two goals for the business: Provide artists with an outlet where they can simultaneously distribute their work and make money, and give wearers a voice in which designs get produced..
“I think my lack of understanding of traditional business stuff has actually helped us. It has been really helpful for our corporate culture,” Nickell said. “Even today, a lot of our decisions about doing stuff are based on how cool it would be.”
The artists receive $2,500 if their design makes it onto a shirt and another $500 if popular demand leads to a reprint of the shirt after the initial run. In recent years, Threadless has moved beyond t-shirts, printing the designs on everything from water bottles to iPod cases. If an artist makes it onto one of those other items, they also receive $500.
That high fee comes from Nickell’s respect for the artists, and many designs never make the company any profit at all.
“Because our award is so generous, many designs never recoup their costs,” Nickell said. “However, we strongly believe in a model that equally rewards all printed artists for the first printing of a tee. This contributes strongly to the ‘all for one and one for all’ spirit of our community.”
Crowd sourced success
By tapping into a community of artists to design the products, and a community of fans to vet them, Threadless became one of the first companies to take advantage of an Internet business model now called crowd sourcing. However, Threadless’ model predates the coining of that phrase by four years, and Nickell hates the term.
“I don’t like [the term] crowd sourcing. It seems sterile and one sided, like a company needs something and goes to the crowd to do it for them,” Nickell said. “We’re more passion-based. We see people doing these awesome things, and we want to help them with it.”
To emphasize that connection with its artists and its customers, Threadless is going on tour this summer. Nickell has transformed a camper trailer into a mobile store that will drive across the U.S., giving customers and artists a chance to meet each other and the company’s employees.
Similarly, in 2007, Threadless opened a brick-and-mortar store in Chicago. Even though the store is far less profitable than the website, it grows the brand as a community center and venue for t-shirt and art classes, Nickell said.
Deliberately opening a store destined to be less successful than a profitable website might seem like a step backward to most business owners, but that move is yet another example of how Threadless has succeeded by putting art first and money second.
“If I had to give up one thing, it would be the money I made from this, because the relationships I’ve made with artists is so valuable,” Nickell said.
To Learn More click Here
Monday, July 12, 2010
Dell Teams Up with T-Shirt Design Website Threadless
Dell computers have quite a bad rep for championing ugly, clunky designs, but that seems to be all in the past now.
Call it couple tees for the technologically-inclined, but Dell has teamed up with the popular crowdsource t-shirt design website, Threadless, in a bid to make their products ‘cool’.
The Threadless collection is available immediately in the Dell Design Studio, where customers can choose from 11 designs to customize the look of their laptop.
Unlike vinyl stickers commonly used to personalize laptops, these images are “permanently imprinted into the laptop lid”, the company said.
So if it’s your thing, show your laptop some love and match your tee to your computer.
If you have other interesting design and art finds, cool websites, or anything that might catch our eye, share it with us at news@hillscreativearts.com
To Learn More Click Here
Call it couple tees for the technologically-inclined, but Dell has teamed up with the popular crowdsource t-shirt design website, Threadless, in a bid to make their products ‘cool’.
The Threadless collection is available immediately in the Dell Design Studio, where customers can choose from 11 designs to customize the look of their laptop.
Unlike vinyl stickers commonly used to personalize laptops, these images are “permanently imprinted into the laptop lid”, the company said.
So if it’s your thing, show your laptop some love and match your tee to your computer.
If you have other interesting design and art finds, cool websites, or anything that might catch our eye, share it with us at news@hillscreativearts.com
To Learn More Click Here
Wednesday, June 16, 2010
Live-Blogging Future of News and Civic Media moving from Crowdsourcing to Crowdbuilding
After the announcement of the Knight News Challenge winners came the first "plenary session" at the Future of News and Civic Media Conference. The topic is "Crowdbuilding," with the following panelists:
Chris Csikszentmihalyi is director of the MIT Center for Future Civic Media.
Gabriella Coleman is an anthropologist who studies the ethics of online collaboration.
Karim Lakhani is an assistant professor at Harvard Business School who studies distributed innovation systems.
Chris Csikszentmihalyi, MIT: The term crowdsourcing has been to the detriment of the news business. "Debian" is a collaborative GNU/Linus release that is powerful enough for space shuttles.
Coleman: Debian founded in 1993, with thousands of pieces of software. Has more people working on it than any free software. There's a "social contract," a "constitution" and "free software guidelines." [Plays clip about following the rules of the constitution.]
Openness is about transparency and code but it's not open to all participation. People think hackers are free-wheeling libertarians, but with any large software projects, their problem-solving skills go into institution building. The membership enter a gateway that all developers must pass through, which is three steps and is a long process that takes months. You might be hooked up with a German mentor who makes you answer 60 questions. They check a new person's identity and checks on technical expertise.
Gabriella Coleman and Karim Lakhani
So why was this created? The project followed a crowd logic. Debian became really popular in the late 1990s, so there was an influx of new developers. So people wanted to include commercial software to start competing with other Linux developers. That disturbed the older members, so they stopped accepting members for more than one year.
We can reach clarity on how to build stable and ethical institutions from the ground up, using this as an example. One of the pitfalls from Debian and Wikipedia is that it's difficult to have open-endedness and freedom but still have rules and red tape. Virtual projects are also marked by apathy as well as flame wars. With projects that are demanding, flame wars come up constantly.
Journalism has always had a strong ethical element. Clay Shirky has argued that the Internet has facilitated group creation. And he's right. It's mind-boggling. He treats it as a net political gain, but I think it has a downside. With the proliferation of so many groups you're competing with members and there's a problem with fragmentation. Every group doesn't need to do everything. There's a limit to the proliferation of project. Collaboration is more important than ever before.
Q: How do you get people involved in projects?
Coleman: Some people are only slightly interested but then get ethically on board. With Debian you don't have to be into the ethical questions to get involved. Projects should be interesting on their own outside of the ethics.
Lakhani, Harvard Business School: Two brothers from Indiana created a Super Bowl ad for Doritos, from a contest that had 1,900 entries. Two ads from the contest were in Top 10 USA Today rankings. Now this has become the regular ad strategy for Pepsi.
Joy's Law haunts innovation efforts. "No matter who you are, most of the smartest people work somewhere else." -- Bill Joy, Sun Microsystems
Here's an example at MIT: Bob Langer, who is very smart and is the expert for tissue engineering. The fact is that the nature of knowledge is that it's highly distributed -- it's unevenly distributed in society. Eric von Hippel said, "Knowledge is sticky."
You start with 1,900 ideas, and then they get filtered and funneled down to the best ideas. We want "extreme value," the one killer idea, not the average value of everything. Most organizations are struggling with how to get distributed knowledge and then figure out how to filter them. You can do it through competition with a diversity of approaches. Contributions tend to be substitutes, as in the Apple app store.
With collaboration, you can get contributions that range from mix & match to co-productions. Can be driven by intrinsic motivations.
Out in the world, there are firms doing collaborations and contests. Here's a company that's doing it very well: Threadless. The idea is to design a T-shirt and become famous. You upload your design, and then they get voted on, from 0 to 5.
Threadless community: 500,000 members; 800 designs per week submitted; 55,000 people have submitted design; 50 million votes made.
Lakhani: The core work for the company is being done outside the firm. And even choosing the designs comes from the community. Out of 800 new designs, they only make 7 each week. So it's very hard to win. Knowledge is out there, so you can enable a set of customers to generate and vote on the best ideas.
Why do people participate? Most people in a contest will lose. It's non-rational behavior. There's a range of motivations: They feel creative; it's fun, building a skill; doing what you want to do; increasing their knowledge. Open source people volunteer an average of 14 hours per week of work.
Q: For people who just got a News Challenge grant, how could you pare down lessons learned to share with them?
Coleman: It depends on the nature of the project. There are all sorts of virtual projects that have innovated in interesting ways. There's a need out there to connect projects, either technically or not technically. I don't see a lot of groups that exist to do that.
Lakhani: There should be a push for transparency. You have a self-archiving history of the project. Put everything on a public email list. With Apache Group, you almost need to show people "candies" or bite-sized things they can accomplish. You will get power distribution, where fewer people do most of the work. You need to just accept that. Competitions and open source often focus on results and not credentials.
Q: What about incentives? If you have $10,000 for a contest, how do you spread that around?
Lakhani: I'm all for allowing for smaller prizes. NASA had a contest where winners got to see a shuttle launch.
Demos of MIT Future of Civic Media Projects
Now comes some demos of student projects. First up is Rick Borovoy, who is showing off Homeless Neighbors. Talks about seeing people sell homeless paper called "Spare Change."
Borovoy: So we wanted to build home pages for the sellers of the papers. So we put a sticker on the paper, which points to the seller's home page. Sticker says, "Peaches is your Spare Change News Vendor. Check out her home page!" [Shows her home page.]
There's also a ChipIn widget that has helped her raise $160 so far for a career development program. Someone tweeted her page and it got a couple hundred hits on it. The sticker is probably the most transformative part about this. Changed her relationship to customers, it personalizes it. This week, the vendors agreed on a question to ask people, and there's an online poll.
We wanted to build a community around the vendors.
Next project: LostInBoston.org. One thing about Boston is that it's hard to find everything. So I wanted to do something about this. What if we could crowdsource better signs and get the government to put up those signs. I went to government and got a pretty tepid response.
But I was walking around Kendall Square and saw lots of private property signs, so maybe there's an opportunity there. Lo and behold, it started to work. Got a pilot project going with the Mass. College of Art. We got a sign for the Avenue of the Arts, and put it up there, on private property.
Now we're going to crowdsource suggestions for future signs. And the government is now interested in helping us.
Next up is the Junkyard Jumbotron. How can you create a spectacle without a big cost? Our idea was to stitch a bunch of laptops together in an ad hoc display. Takes a picture of the array of laptops and then email it to the special address. This is a live demo with eight laptops.
The system then parses it, and sends the image to all the laptops.
To Learn More Click Here
Chris Csikszentmihalyi is director of the MIT Center for Future Civic Media.
Gabriella Coleman is an anthropologist who studies the ethics of online collaboration.
Karim Lakhani is an assistant professor at Harvard Business School who studies distributed innovation systems.
Chris Csikszentmihalyi, MIT: The term crowdsourcing has been to the detriment of the news business. "Debian" is a collaborative GNU/Linus release that is powerful enough for space shuttles.
Coleman: Debian founded in 1993, with thousands of pieces of software. Has more people working on it than any free software. There's a "social contract," a "constitution" and "free software guidelines." [Plays clip about following the rules of the constitution.]
Openness is about transparency and code but it's not open to all participation. People think hackers are free-wheeling libertarians, but with any large software projects, their problem-solving skills go into institution building. The membership enter a gateway that all developers must pass through, which is three steps and is a long process that takes months. You might be hooked up with a German mentor who makes you answer 60 questions. They check a new person's identity and checks on technical expertise.
Gabriella Coleman and Karim Lakhani
So why was this created? The project followed a crowd logic. Debian became really popular in the late 1990s, so there was an influx of new developers. So people wanted to include commercial software to start competing with other Linux developers. That disturbed the older members, so they stopped accepting members for more than one year.
We can reach clarity on how to build stable and ethical institutions from the ground up, using this as an example. One of the pitfalls from Debian and Wikipedia is that it's difficult to have open-endedness and freedom but still have rules and red tape. Virtual projects are also marked by apathy as well as flame wars. With projects that are demanding, flame wars come up constantly.
Journalism has always had a strong ethical element. Clay Shirky has argued that the Internet has facilitated group creation. And he's right. It's mind-boggling. He treats it as a net political gain, but I think it has a downside. With the proliferation of so many groups you're competing with members and there's a problem with fragmentation. Every group doesn't need to do everything. There's a limit to the proliferation of project. Collaboration is more important than ever before.
Q: How do you get people involved in projects?
Coleman: Some people are only slightly interested but then get ethically on board. With Debian you don't have to be into the ethical questions to get involved. Projects should be interesting on their own outside of the ethics.
Lakhani, Harvard Business School: Two brothers from Indiana created a Super Bowl ad for Doritos, from a contest that had 1,900 entries. Two ads from the contest were in Top 10 USA Today rankings. Now this has become the regular ad strategy for Pepsi.
Joy's Law haunts innovation efforts. "No matter who you are, most of the smartest people work somewhere else." -- Bill Joy, Sun Microsystems
Here's an example at MIT: Bob Langer, who is very smart and is the expert for tissue engineering. The fact is that the nature of knowledge is that it's highly distributed -- it's unevenly distributed in society. Eric von Hippel said, "Knowledge is sticky."
You start with 1,900 ideas, and then they get filtered and funneled down to the best ideas. We want "extreme value," the one killer idea, not the average value of everything. Most organizations are struggling with how to get distributed knowledge and then figure out how to filter them. You can do it through competition with a diversity of approaches. Contributions tend to be substitutes, as in the Apple app store.
With collaboration, you can get contributions that range from mix & match to co-productions. Can be driven by intrinsic motivations.
Out in the world, there are firms doing collaborations and contests. Here's a company that's doing it very well: Threadless. The idea is to design a T-shirt and become famous. You upload your design, and then they get voted on, from 0 to 5.
Threadless community: 500,000 members; 800 designs per week submitted; 55,000 people have submitted design; 50 million votes made.
Lakhani: The core work for the company is being done outside the firm. And even choosing the designs comes from the community. Out of 800 new designs, they only make 7 each week. So it's very hard to win. Knowledge is out there, so you can enable a set of customers to generate and vote on the best ideas.
Why do people participate? Most people in a contest will lose. It's non-rational behavior. There's a range of motivations: They feel creative; it's fun, building a skill; doing what you want to do; increasing their knowledge. Open source people volunteer an average of 14 hours per week of work.
Q: For people who just got a News Challenge grant, how could you pare down lessons learned to share with them?
Coleman: It depends on the nature of the project. There are all sorts of virtual projects that have innovated in interesting ways. There's a need out there to connect projects, either technically or not technically. I don't see a lot of groups that exist to do that.
Lakhani: There should be a push for transparency. You have a self-archiving history of the project. Put everything on a public email list. With Apache Group, you almost need to show people "candies" or bite-sized things they can accomplish. You will get power distribution, where fewer people do most of the work. You need to just accept that. Competitions and open source often focus on results and not credentials.
Q: What about incentives? If you have $10,000 for a contest, how do you spread that around?
Lakhani: I'm all for allowing for smaller prizes. NASA had a contest where winners got to see a shuttle launch.
Demos of MIT Future of Civic Media Projects
Now comes some demos of student projects. First up is Rick Borovoy, who is showing off Homeless Neighbors. Talks about seeing people sell homeless paper called "Spare Change."
Borovoy: So we wanted to build home pages for the sellers of the papers. So we put a sticker on the paper, which points to the seller's home page. Sticker says, "Peaches is your Spare Change News Vendor. Check out her home page!" [Shows her home page.]
There's also a ChipIn widget that has helped her raise $160 so far for a career development program. Someone tweeted her page and it got a couple hundred hits on it. The sticker is probably the most transformative part about this. Changed her relationship to customers, it personalizes it. This week, the vendors agreed on a question to ask people, and there's an online poll.
We wanted to build a community around the vendors.
Next project: LostInBoston.org. One thing about Boston is that it's hard to find everything. So I wanted to do something about this. What if we could crowdsource better signs and get the government to put up those signs. I went to government and got a pretty tepid response.
But I was walking around Kendall Square and saw lots of private property signs, so maybe there's an opportunity there. Lo and behold, it started to work. Got a pilot project going with the Mass. College of Art. We got a sign for the Avenue of the Arts, and put it up there, on private property.
Now we're going to crowdsource suggestions for future signs. And the government is now interested in helping us.
Next up is the Junkyard Jumbotron. How can you create a spectacle without a big cost? Our idea was to stitch a bunch of laptops together in an ad hoc display. Takes a picture of the array of laptops and then email it to the special address. This is a live demo with eight laptops.
The system then parses it, and sends the image to all the laptops.
To Learn More Click Here
Saturday, May 8, 2010
The Customer Knows Best
Using crowdsourcing to build a better business
Rob Langstaff knows shoes. He spent 16 years working for Adidas, including three years as president of Adidas Japan and one year as president of Adidas America. Yet, when he walked away from the second largest athletic shoe company and started his own business in June 2008, it wasn’t to impart his extensive expertise on shoes to others, but to let others design the shoes they wanted to wear.
“I thought that a lot of companies had lost touch with their customers,” Langstaff says. “In a lot of market-driven companies where you’re marketing to the 17- to 25-year-old bracket, the marketing managers are usually men in their 40s and 50s.” Instead, Langstaff wanted to take a bottom-up approach, giving customers input into the design. “You get a lot more diversity and range of ideas.”
From that concept of tapping into an existing customer base, sprang RYZ (pronounced rise), Langstaff’s online shoe company featuring a line of shoes designed and selected by customers who vote on the ones they like best. The winning designer, chosen partly by users’ votes and company officials’ discretion, wins $1,000. RYZ then manufactures the shoe and sells it on its Web site.
RYZ is among an increasing number of companies embracing this customer-knows-best approach. Jeff HoweWhile each follows a slightly different model, they all fall under the umbrella of crowdsourcing, a term coined in 2006 by Jeff Howe, a contributing editor at Wired and author of the book Crowdsourcing: How the Power of the Crowd Is Driving the Future of Business. The term is loosely defined as taking a problem usually handled by a specific person (typically an employee) and presenting it to a broad, undefined group of people, or the crowd.
Using the Crowd to Solve Problems
The best-known example of crowdsourcing is Wikipedia, the free, user-contributed online encyclopedia. Netflix also used a crowdsourcing model to improve its movie recommendation system, awarding $1 million last September to a team that came up with a better algorithm.
But you don’t have to base your business’s entire product or service on crowdsourcing to benefit from the wisdom of the masses and develop a stronger connection with your client base. Companies that specialize in providing crowdsourcing solutions are increasingly popular among small businesses that want to build relationships and tap into the community for feedback, while potentially saving time and capital that would be spent on solving big problems or brainstorming innovations. Some examples:
* Companies like InnoCentive act as the middlemen between businesses with wide-ranging problems and people who want to try and solve them for a fee. Businesses, which may remain anonymous, post their challenges and corresponding bounties, and InnoCentive’s solver community of experts can work on whatever problem they want at their own leisure to try for prizes.
* The website Brand Tag asks users to type in the first word or phrase that comes to mind when they see a particular brand, giving each company a list of searchable tags associated with their brand.
* Lead Vine allows business owners to post sales leads they’re seeking, name their referral fee and have the online community act as an extended sales force.
* And Inkling Markets provides crowdsource testing of your online or product designs, as well as identification of the most promising projects in your portfolio.
Engaging Your Community
Online T-shirt companies Threadless, founded in 2000, and Cameesa in 2008, use different variations of crowdsourcing to design and select T-shirts to sell on their Web sites. Threadless uses a combination of voting and its own discretion to determine which T-shirts are printed, while Cameesa relies solely on crowdfunding, in which Cameesaparticipants buy shares of the design they like, and shirts that reach $500 get printed and offered for sale. Then each shareholder receives a free T-shirt and royalties for every shirt sold. The winning artist receives $250 plus $2 for each sale after 125 have been sold.
But you don’t have to employ a specialized service to get a taste of what crowdsourcing could do for your business. If you’re savvy on Facebook or Twitter, try using those sites to reach out to your existing communities or fans. For example, says Howe, “if I were running a moving company, I’d want to be on Twitter and Facebook, talking to everyone who’s moving and finding out what their concerns are,” he says. You can use this feedback to improve customer service, tailor discounts or target certain areas of town. Whether or not the people who provided the feedback become actual clients or not is irrelevant. The point, Howe says, is that you are building and engaging a community. “Find your constituents and become friends with them.” Retail giant Best Buy’s Geek Squad is now on Twitter, answering its customers’ questions. Wikipedia founder Jimmy Wales points out that often other people who are not part of the Geek Squad will see the question, know the answer and respond. “And it’s sort of engaging the whole community,” Wales says. One question can elicit multiple answers, and other people who may have the same question can also benefit. This kind of interaction builds brand identification and customer loyalty.
The Biggest Drawback... and Benefit
Some of the benefits of crowdsourcing are obvious. For one, it’s cheap, although experts say that shouldn’t be the only reason to employ it. Crowdsourcing also can empower customers and engender loyalty. By giving customers the power to design the shoes they want, Langstaff says they feel a certain ownership of the company. The same would hold true for a company that used Facebook to tap into its customer base for help in solving a customer service challenge.
While there are many benefits to crowdsourcing, there also can be disadvantages. One is the quality or reliability of the product, whether it’s T-shirt designs, market predictions or encyclopedic information.
Cameesa co-founder Kamil Chmielewski says he worried the site wouldn’t attract serious artists. Cameesa has tweaked the rules, such as taking down a design if it doesn’t get funding after 30 days, but ultimately, Chmielewski’s concerns were unfounded. The company currently has 140 designs on the site, and the quality is constantly improving, he says.
Relinquishing control can make business owners uneasy, but Chmielewski says it’s worth the risk to discover what research and development often fail to provide: what customers want. “We do feel that the problem with companies these days is that they believe they know what the people want,” he says.
Crowdsourcing takes some of the guesswork out of establishing your customers’ motivations for buying. And today, businesses using crowdsourcing are continually refining their models to help shape and drive business. People from all over the world can now work together, share ideas and form communities. And experts agree that community is really what crowdsourcing is all about.
To Learn More Click Here
Rob Langstaff knows shoes. He spent 16 years working for Adidas, including three years as president of Adidas Japan and one year as president of Adidas America. Yet, when he walked away from the second largest athletic shoe company and started his own business in June 2008, it wasn’t to impart his extensive expertise on shoes to others, but to let others design the shoes they wanted to wear.
“I thought that a lot of companies had lost touch with their customers,” Langstaff says. “In a lot of market-driven companies where you’re marketing to the 17- to 25-year-old bracket, the marketing managers are usually men in their 40s and 50s.” Instead, Langstaff wanted to take a bottom-up approach, giving customers input into the design. “You get a lot more diversity and range of ideas.”
From that concept of tapping into an existing customer base, sprang RYZ (pronounced rise), Langstaff’s online shoe company featuring a line of shoes designed and selected by customers who vote on the ones they like best. The winning designer, chosen partly by users’ votes and company officials’ discretion, wins $1,000. RYZ then manufactures the shoe and sells it on its Web site.
RYZ is among an increasing number of companies embracing this customer-knows-best approach. Jeff HoweWhile each follows a slightly different model, they all fall under the umbrella of crowdsourcing, a term coined in 2006 by Jeff Howe, a contributing editor at Wired and author of the book Crowdsourcing: How the Power of the Crowd Is Driving the Future of Business. The term is loosely defined as taking a problem usually handled by a specific person (typically an employee) and presenting it to a broad, undefined group of people, or the crowd.
Using the Crowd to Solve Problems
The best-known example of crowdsourcing is Wikipedia, the free, user-contributed online encyclopedia. Netflix also used a crowdsourcing model to improve its movie recommendation system, awarding $1 million last September to a team that came up with a better algorithm.
But you don’t have to base your business’s entire product or service on crowdsourcing to benefit from the wisdom of the masses and develop a stronger connection with your client base. Companies that specialize in providing crowdsourcing solutions are increasingly popular among small businesses that want to build relationships and tap into the community for feedback, while potentially saving time and capital that would be spent on solving big problems or brainstorming innovations. Some examples:
* Companies like InnoCentive act as the middlemen between businesses with wide-ranging problems and people who want to try and solve them for a fee. Businesses, which may remain anonymous, post their challenges and corresponding bounties, and InnoCentive’s solver community of experts can work on whatever problem they want at their own leisure to try for prizes.
* The website Brand Tag asks users to type in the first word or phrase that comes to mind when they see a particular brand, giving each company a list of searchable tags associated with their brand.
* Lead Vine allows business owners to post sales leads they’re seeking, name their referral fee and have the online community act as an extended sales force.
* And Inkling Markets provides crowdsource testing of your online or product designs, as well as identification of the most promising projects in your portfolio.
Engaging Your Community
Online T-shirt companies Threadless, founded in 2000, and Cameesa in 2008, use different variations of crowdsourcing to design and select T-shirts to sell on their Web sites. Threadless uses a combination of voting and its own discretion to determine which T-shirts are printed, while Cameesa relies solely on crowdfunding, in which Cameesaparticipants buy shares of the design they like, and shirts that reach $500 get printed and offered for sale. Then each shareholder receives a free T-shirt and royalties for every shirt sold. The winning artist receives $250 plus $2 for each sale after 125 have been sold.
But you don’t have to employ a specialized service to get a taste of what crowdsourcing could do for your business. If you’re savvy on Facebook or Twitter, try using those sites to reach out to your existing communities or fans. For example, says Howe, “if I were running a moving company, I’d want to be on Twitter and Facebook, talking to everyone who’s moving and finding out what their concerns are,” he says. You can use this feedback to improve customer service, tailor discounts or target certain areas of town. Whether or not the people who provided the feedback become actual clients or not is irrelevant. The point, Howe says, is that you are building and engaging a community. “Find your constituents and become friends with them.” Retail giant Best Buy’s Geek Squad is now on Twitter, answering its customers’ questions. Wikipedia founder Jimmy Wales points out that often other people who are not part of the Geek Squad will see the question, know the answer and respond. “And it’s sort of engaging the whole community,” Wales says. One question can elicit multiple answers, and other people who may have the same question can also benefit. This kind of interaction builds brand identification and customer loyalty.
The Biggest Drawback... and Benefit
Some of the benefits of crowdsourcing are obvious. For one, it’s cheap, although experts say that shouldn’t be the only reason to employ it. Crowdsourcing also can empower customers and engender loyalty. By giving customers the power to design the shoes they want, Langstaff says they feel a certain ownership of the company. The same would hold true for a company that used Facebook to tap into its customer base for help in solving a customer service challenge.
While there are many benefits to crowdsourcing, there also can be disadvantages. One is the quality or reliability of the product, whether it’s T-shirt designs, market predictions or encyclopedic information.
Cameesa co-founder Kamil Chmielewski says he worried the site wouldn’t attract serious artists. Cameesa has tweaked the rules, such as taking down a design if it doesn’t get funding after 30 days, but ultimately, Chmielewski’s concerns were unfounded. The company currently has 140 designs on the site, and the quality is constantly improving, he says.
Relinquishing control can make business owners uneasy, but Chmielewski says it’s worth the risk to discover what research and development often fail to provide: what customers want. “We do feel that the problem with companies these days is that they believe they know what the people want,” he says.
Crowdsourcing takes some of the guesswork out of establishing your customers’ motivations for buying. And today, businesses using crowdsourcing are continually refining their models to help shape and drive business. People from all over the world can now work together, share ideas and form communities. And experts agree that community is really what crowdsourcing is all about.
To Learn More Click Here
Sunday, May 2, 2010
Advice From Founders Who Bootstrapped Their Way to Success
In my last post, I discussed why the odds of a rookie entrepreneur getting seed financing from a VC are very slim. The reality is that less than 5% of venture money goes to seed-stage startups; VCs typically invest when a company has a working product, a tested business model, and a strong management team. It’s the entrepreneurs who take the risk; not the VCs. They beg and borrow money from friends and family, max out their credit cards, and sometimes make do by living at home with their parents. Yet, very often, it’s the VCs who get the glory. I don’t think that’s fair. So in this post, I’m going to highlight three bootstrapped companies, and share the advice of their founders. In my books, entrepreneurs are the real heroes—those who make the innovation happen. They are the ones you should be following on Twitter and learning from, not boastful VCs.
Take Chicago-based Threadless. Its founder, Jake Nickell, built a very profitable $40 million business by bringing crowdsourcing to the mundane world of t-shirt design. Threadless sells millions of tee shirts every year and has been growing annually at double-digit percentage rates. It was founded in 2000, after Nickell, then a 20-year-old web developer, won a t-shirt-design contest. With an investment of $1000, he built a website to which people submitted t-shirt designs, and the favorites were printed in limited-edition runs. In 2006, the company had gained traction, was generating nearly $10 million in revenue, and took a small investment from Insight Venture Partners.
My Q&A with Jake:
Would you have taken a VC investment if you could have, when you started?
Definitely not, as I was starting a hobby and not a business. It’s kind of like asking if I would consider a VC investment to help me start learning to skateboard. Sure, I’d spend a couple hundred bucks on a board, some pads and maybe some materials to build a ramp, but I’m not looking for millions or even hundreds or tens of thousands to just create something for fun. Even if I was starting a business, I don’t think I was raised that way or have that type of personality. I didn’t even have my first credit card until I was maybe 23, so I really just don’t do well with spending money I don’t have.
Why did you take investment and how has that experience been? What changed after taking VC?
We were having major operations trouble and weren’t incredibly excited about fixing it ourselves. I never finished college and my background is more in art/programming. In ’05 if you ordered a tee during our holiday sale, you’d probably get it three weeks after Christmas. We had a few choices… outsource all that stuff (but still have to manage it), work with consultants to help us figure out what to do, or to get someone who knew what they were doing to invest in the company and help us. We felt that last option was best.
The experience has been great. There was no shortage of interest from VC firms in investing in us, so we got to be pretty choosy about whom we worked with. We got really comfortable with Insight as they had some programs in place for helping us, and we got along really well with them. A lot has changed after taking the VC—we are now operationally sound and actually ship orders out in a decent timeframe!
What advice would you give fellow entrepreneurs?
If you want your life to be fun as an entrepreneur, I suggest going into it with realistic expectations and to measure your success in different ways than financially. I’ve done well financially with Threadless, but if I had to give up one thing, the money would be the first thing to go. The happiness, relationships, enrichment in others’ lives, the community that now exists; the opportunities brought to artists—that’s the success that really matters for Threadless. Build your business in a way that lets you say that, and mean it too.
Pointabout is a Washington D.C. based startup that markets a mobile-application builder, AppMakr.com. Founded in 2008, by Scott Suhy, Daniel R. Odio, Sean Shadmad, and Isaac Mosquera, the company started building custom apps for companies like Disney, The Washington Post, Newsweek, and Politico. They used this revenue to fund the development of their flagship product. Two years later, the Pointabout is profitable, with revenues approaching $2 million annually. It’s not that the founders didn’t try raising VC; things are even tougher in D.C. than in Silicon Valley, so they decided to bootstrap.
My Q&A with the team:
Would you have been better off if you could have raised VC when you started?
We’re really glad we didn’t. It’s easy to burn through a lot of cash trying to figure your business out. Bootstrapping (especially in a recession) has forced us to focus on what works, and on gaining traction. The right time to take money is when you have something that works and you want to blow it out of the water with explosive growth. Taking money too early often hurts more than it helps, and looking back on our growth, we believe that would have likely been the case with us.
Did you have to make major tradeoffs by going down the custom development/consulting route?
Sure, we made plenty of trade-offs. Many tough round-table meetings. We funded our growth by developing our AppMakr.com product based on custom app consulting revenue. This month we’ve been successful enough to break out our P&Ls so we can draw a line in the sand between the consulting and product divisions. We’ll continue to separate these two as we grow. The product drives consulting revenue when clients want features that it can’t provide. And since the consulting side is close to the customer, it helps drive our product roadmap.
What advice would you give entrepreneurs?
Focus hard and focus on your core. Almost anyone can make any one thing great if they focus on it and dedicate their life to it. If all you did was think about how to make one specific thing awesome every day, you would succeed.
Entrepreneurism is glamorized and romanticized, but at the end of the day, it’s really, really hard work, and it requires a lot of sacrifice—not just from you, but from the people around you. Make sure your friends and family are ready to support you, and then jump in. Don’t let the fear keep you from doing it. You only live once, so if this is what you’re passionate about, don’t have any regrets looking back on your life. Just do it.
I’ve written about the dearth of women and minorities in tech entrepreneurship. Timothy Bernard Jones, an African-American entrepreneur, is one of the rare success stories. He founded Buzzient in 2007, to market a SaaS application that enables users to integrate social media into business applications. It allows Oracle CRM to integrate data from Twitter, Facebook, and YouTube, for example. Having been an associate at a VC firm in his past, Jones decided to forsake VC and to bootstrap instead. He wants to build considerable value before seriously considering venture capital. With revenues in the “low millions of dollars” and having achieved profitability, Buzzient certainly seems on track.
I asked Tim how much of a factor his skin color was in his decision not to raise VC.
I wouldn’t say being black put either me or Buzzient at a disadvantage, but bootstrapping has been a big advantage. I have had absolutely no illusion about being able to walk into a VC pitch wearing a t-shirt and flip-flops and walk out with a term sheet. I know that if I had dropped out of college, there is no way I would be considered “entrepreneurial” or “visionary”; I’d just be “a college dropout”. So, in my case, and for the company I lead, we’ve created a culture of self-sufficiency that is very different from the mentality I see with so many venture-funded companies. Look, we’ve already outlasted tons of venture-funded companies, and I think that’s a direct result of the survival mentality we created early on.
What were the keys to your success?
The first rule is to relentlessly focus on your customers. We have Global 5000 clients, such as Xerox, Credit Suisse, and Perkin Elmer, who rely on Buzzient for social-media insights on their existing and prospective customers. VC-backed companies often go off on tangents based on business-school strategy sessions and the like; as a bootstrapped company you live and die by how happy and successful your customers are, and in keeping them so. Everything revolves around customer focus; what people you bring into the company and when, what technology you build and what features you add to the specification; everything. If we’d not focused as much on customers, Buzzient would not have made it through the recession.
What advice would you give entrepreneurs?
Don’t believe the hype and noise about how “easy” it is to do a startup and how money is literally falling from heaven into startups. Every time I drive by Sand Hill Road, I see clumps of “fresh fish”, shuffling from pitch to pitch, who equate raising VC with having a successful company. Look, this is hard; if you’re really building something of value, it’s going to be hard, and you have to be prepared to endure a lot. The finish line is liquidity for your shareholders, investors, and employees, not a VC raise.
I’d also advise entrepreneurs to not follow VC insights on what sectors to build companies in. VCs for the most part are following trends, not looking ahead of the curve. So, as an entrepreneur you fundamentally have to do something outside the scope of what VCs are currently investing in; if not you’ll end up doing yet another me-too company that doesn’t stand out. That means you have to consciously ignore a lot of the noise about trends, who got funded, the “blah blah blah” of the tech world. That’s the only way you’ll be able to focus on creating your own unique value proposition.
All these entrepreneurs have great advice to offer, don’t they? There are thousands like these who have paved the entrepreneurial trails—thousands whom you should listen to and learn from.
Read more: http://techcrunch.com/2010/05/01/advice-from-founders-who-bootstrapped-their-way-to-success-2/#ixzz0mn7oEH9s
To Learn More Click Here
Take Chicago-based Threadless. Its founder, Jake Nickell, built a very profitable $40 million business by bringing crowdsourcing to the mundane world of t-shirt design. Threadless sells millions of tee shirts every year and has been growing annually at double-digit percentage rates. It was founded in 2000, after Nickell, then a 20-year-old web developer, won a t-shirt-design contest. With an investment of $1000, he built a website to which people submitted t-shirt designs, and the favorites were printed in limited-edition runs. In 2006, the company had gained traction, was generating nearly $10 million in revenue, and took a small investment from Insight Venture Partners.
My Q&A with Jake:
Would you have taken a VC investment if you could have, when you started?
Definitely not, as I was starting a hobby and not a business. It’s kind of like asking if I would consider a VC investment to help me start learning to skateboard. Sure, I’d spend a couple hundred bucks on a board, some pads and maybe some materials to build a ramp, but I’m not looking for millions or even hundreds or tens of thousands to just create something for fun. Even if I was starting a business, I don’t think I was raised that way or have that type of personality. I didn’t even have my first credit card until I was maybe 23, so I really just don’t do well with spending money I don’t have.
Why did you take investment and how has that experience been? What changed after taking VC?
We were having major operations trouble and weren’t incredibly excited about fixing it ourselves. I never finished college and my background is more in art/programming. In ’05 if you ordered a tee during our holiday sale, you’d probably get it three weeks after Christmas. We had a few choices… outsource all that stuff (but still have to manage it), work with consultants to help us figure out what to do, or to get someone who knew what they were doing to invest in the company and help us. We felt that last option was best.
The experience has been great. There was no shortage of interest from VC firms in investing in us, so we got to be pretty choosy about whom we worked with. We got really comfortable with Insight as they had some programs in place for helping us, and we got along really well with them. A lot has changed after taking the VC—we are now operationally sound and actually ship orders out in a decent timeframe!
What advice would you give fellow entrepreneurs?
If you want your life to be fun as an entrepreneur, I suggest going into it with realistic expectations and to measure your success in different ways than financially. I’ve done well financially with Threadless, but if I had to give up one thing, the money would be the first thing to go. The happiness, relationships, enrichment in others’ lives, the community that now exists; the opportunities brought to artists—that’s the success that really matters for Threadless. Build your business in a way that lets you say that, and mean it too.
Pointabout is a Washington D.C. based startup that markets a mobile-application builder, AppMakr.com. Founded in 2008, by Scott Suhy, Daniel R. Odio, Sean Shadmad, and Isaac Mosquera, the company started building custom apps for companies like Disney, The Washington Post, Newsweek, and Politico. They used this revenue to fund the development of their flagship product. Two years later, the Pointabout is profitable, with revenues approaching $2 million annually. It’s not that the founders didn’t try raising VC; things are even tougher in D.C. than in Silicon Valley, so they decided to bootstrap.
My Q&A with the team:
Would you have been better off if you could have raised VC when you started?
We’re really glad we didn’t. It’s easy to burn through a lot of cash trying to figure your business out. Bootstrapping (especially in a recession) has forced us to focus on what works, and on gaining traction. The right time to take money is when you have something that works and you want to blow it out of the water with explosive growth. Taking money too early often hurts more than it helps, and looking back on our growth, we believe that would have likely been the case with us.
Did you have to make major tradeoffs by going down the custom development/consulting route?
Sure, we made plenty of trade-offs. Many tough round-table meetings. We funded our growth by developing our AppMakr.com product based on custom app consulting revenue. This month we’ve been successful enough to break out our P&Ls so we can draw a line in the sand between the consulting and product divisions. We’ll continue to separate these two as we grow. The product drives consulting revenue when clients want features that it can’t provide. And since the consulting side is close to the customer, it helps drive our product roadmap.
What advice would you give entrepreneurs?
Focus hard and focus on your core. Almost anyone can make any one thing great if they focus on it and dedicate their life to it. If all you did was think about how to make one specific thing awesome every day, you would succeed.
Entrepreneurism is glamorized and romanticized, but at the end of the day, it’s really, really hard work, and it requires a lot of sacrifice—not just from you, but from the people around you. Make sure your friends and family are ready to support you, and then jump in. Don’t let the fear keep you from doing it. You only live once, so if this is what you’re passionate about, don’t have any regrets looking back on your life. Just do it.
I’ve written about the dearth of women and minorities in tech entrepreneurship. Timothy Bernard Jones, an African-American entrepreneur, is one of the rare success stories. He founded Buzzient in 2007, to market a SaaS application that enables users to integrate social media into business applications. It allows Oracle CRM to integrate data from Twitter, Facebook, and YouTube, for example. Having been an associate at a VC firm in his past, Jones decided to forsake VC and to bootstrap instead. He wants to build considerable value before seriously considering venture capital. With revenues in the “low millions of dollars” and having achieved profitability, Buzzient certainly seems on track.
I asked Tim how much of a factor his skin color was in his decision not to raise VC.
I wouldn’t say being black put either me or Buzzient at a disadvantage, but bootstrapping has been a big advantage. I have had absolutely no illusion about being able to walk into a VC pitch wearing a t-shirt and flip-flops and walk out with a term sheet. I know that if I had dropped out of college, there is no way I would be considered “entrepreneurial” or “visionary”; I’d just be “a college dropout”. So, in my case, and for the company I lead, we’ve created a culture of self-sufficiency that is very different from the mentality I see with so many venture-funded companies. Look, we’ve already outlasted tons of venture-funded companies, and I think that’s a direct result of the survival mentality we created early on.
What were the keys to your success?
The first rule is to relentlessly focus on your customers. We have Global 5000 clients, such as Xerox, Credit Suisse, and Perkin Elmer, who rely on Buzzient for social-media insights on their existing and prospective customers. VC-backed companies often go off on tangents based on business-school strategy sessions and the like; as a bootstrapped company you live and die by how happy and successful your customers are, and in keeping them so. Everything revolves around customer focus; what people you bring into the company and when, what technology you build and what features you add to the specification; everything. If we’d not focused as much on customers, Buzzient would not have made it through the recession.
What advice would you give entrepreneurs?
Don’t believe the hype and noise about how “easy” it is to do a startup and how money is literally falling from heaven into startups. Every time I drive by Sand Hill Road, I see clumps of “fresh fish”, shuffling from pitch to pitch, who equate raising VC with having a successful company. Look, this is hard; if you’re really building something of value, it’s going to be hard, and you have to be prepared to endure a lot. The finish line is liquidity for your shareholders, investors, and employees, not a VC raise.
I’d also advise entrepreneurs to not follow VC insights on what sectors to build companies in. VCs for the most part are following trends, not looking ahead of the curve. So, as an entrepreneur you fundamentally have to do something outside the scope of what VCs are currently investing in; if not you’ll end up doing yet another me-too company that doesn’t stand out. That means you have to consciously ignore a lot of the noise about trends, who got funded, the “blah blah blah” of the tech world. That’s the only way you’ll be able to focus on creating your own unique value proposition.
All these entrepreneurs have great advice to offer, don’t they? There are thousands like these who have paved the entrepreneurial trails—thousands whom you should listen to and learn from.
Read more: http://techcrunch.com/2010/05/01/advice-from-founders-who-bootstrapped-their-way-to-success-2/#ixzz0mn7oEH9s
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