Wize Thoughts

I know there are some folks out there who don’t like sites like 99designs, where you are able to put up a contest to have someone design a logo or home page for you and then you get to pick from the best and award the prize.

But for the 4th time out of 5 trys I’m blown away at how well it works for  me.

A year ago when we went to launch WizeHive I put out a $300 bid for a logo and got 69 entries, and had at least 5 that I thought would have been acceptable.      A month later I put out a  $400 bid for a new DreamIt logo and got 122 submissions of which probably 3 to 5 were also great.

A bit later last year we put a bid up for a new DreamIt homepage and offered $850 and only got 33 submissions.   A few were really good and we selected one.  But it also reinforced a bias that you got many less submissions for a web page then for a logo because quite naturally it takes longer for people to mock up a home page and they are not sure they will win.   (I had formed thatbias from when I only got 5 responses to another web site design a year earlier).

So we are currently working on some specialty applications for WizeHive that will be launching soon and have been using a home grown landing page for the last month or so.    I decided that despite my bias that 99designs was not great for a home page I thought I’d give it a shot since the risk is < $50 to submit a project.     I studied some of the other contests and saw another one where someone indicated “Simple Home Page” layout and had a good response  decided since we already had the elements we wanted I’d try to position the project as being a simple one page design.

I picked a middle ground of about $500 for this; more than logos but less than some other web pages;  but did not guarantee it; meaning if I didn’t like the designs I did not have to pick a winner.    Within a few days I not only had about 15 designs; but more than 1 that I thought was better than our current site.  So I went in and guaranteed the contest.    This provides more incentive for folks to submit designs because they know someone is going to win…and in turn this took me to a final tally of 127 choices!

I also spent considerable time giving feedback on them until the last day or two; even offering specific suggestions to some of them where I liked the design but wanted some things flipped around.

Anyway, I have not yet picked a final design and may actually run a small contest asking WizeHive followers to help us pick after I narrow it down.     But from my perspective the 99designs crowd sourcing concept is a hugely positive value proposition.

This just made me laugh.  This is the exec team of comcast as seen on Philly.com today looking at their new holiday display.   The Chairman, CEO, Chairman Emeritus and Exec Vice President.

Good to know a 46B company is in such good hands…

So business is crazy busy as we grow our web based collaboration tool, WizeHive and I know I need help.   Administrative help, marketing help, sales help, SEO help, etc.     I also know that since I oversee most of the administration and logistics for DreamIt Ventures I’m going to need some help there too as the fall roles around to deal with accounting issues and the like.

So Sunday morning I decided to run an ad on craigslist focused on finding some help.    The focus on the ad was my need for administrative  help but I left the door open for folks with all sorts of different talents to apply since I could use help for WizeHive, DreamIt and a few other things I’m involved in.

The ad worked well, I’ve gotten about 300 emails so far and a great mix of talent.    The range of responses is so great I thought I could share so do’s and don’ts if you are applying for a job or know someone who is.   These are all from the responses I got the last few days.

First, with hundreds of other emails and a 3 page todo list I can’t spend a ton of time going through a first pass on the 300+ applications so my first goal is to quickly sift them into categories.   Categories I’ve made up are essentially good, maybe, probably not and no.     So my first goal is within a very short amount of time, probably about 30 seconds, to categorize each response into one of these categories.   Then I will go through and rank those in the good and contact them first, then go through the maybe’s and contact them second…and if I haven’t found who I’m looking for I may go further.

So what puts things into these categories.   There are some gray areas but here are some real answers based on what i received.

Lets start with what gets moved to the no pile really fast:

Call me:  It is hard for me to believe but I probably have 10 to 20 emails that do not include a resume, include very little info but instead say  ”I reviewed your job posting and I can really help you.  My number is xxx-xxx-xxxx.  Please call.”    Sure, buddy, I’ve got hours to spend talking on the phone to people I know little or nothing about.     Next.

Attach a resume only:  I probably have another 5% to 10% that attach a resume and send it to me.  No cover note or anything to give me the impression that they even read the job description and feel they are qualified.    So my inclination before I even look at the resume is that they are going into the no pile and I don’t think I’ve looked at a resume that convinced me to change my mind.

Spouse’s email: OK..maybe there is a legit reason for this but why do I get an email from Joe Smith from Mary Smith’s email address.   I’m in a tech business and I want tech savvy people.    What does it say about them if it comes from their spouse’s email address?  Actually I had a funny exchange today because I sent a quick “Thanks I”m looking at the resumes and I’ll get back to you” blast to all the people I received resumes from and I got copied in on an email between the spouses accidentally forwarding the emails around.   I knew it wasn’t for me when there was a big “I LOVE YOU XXX” at the bottom of the note (or is that how some people try to get jobs?)

AOL email address:  OK…this isn’t an absolute no but come on.  I’ve probably gone from AOL to something to comcast to Gmail over the last 10 years.    How tech savvy do I feel about someone still using an AOL email address.  Not a definite “no” but a bad first impression.  Sorry AOL.

So…what gets me excited?  Who has done a good job and is in my top category?

When I posted the jobs I did not use my name and I also used an anonomous (craigslist) email address, but I did mention WizeHive and DreamIt.   There were 2 out of 300 that spent enough time to check the sites to see who was posting and then wrote a personalized email to me by name.    Do they get the job?   Don’t know…but they are in my top category almost out of the shoot.   All other skill sets being equal I am looking for someone who shows creativity and initiative and it doesn’t get much better then that.

There are another batch, maybe 20 or 25, where the people did almost as well.  They checked into DreamIt and WizeHive sites, took the time to learn a little about the businesses, and shared with me in one way or the other that they took the time to check things out.    This does not automatically get them the prize, but it sure puts them ahead of generic responses.

So in general, if you really want that job take your time to sell yourself.  Do your homework and tell them how you are going to help THEM, not what you are looking for…  It certainly would have a much higher chance of success then the other way around.

Well, enough blogging time, back to the resumes…

WizeHive just completed an amazing project where our platform was picked to allow the folks at TechCrunch to manage, rate and review the thousands of TechCrunch applications they received for the TechCrunch50 conference.

While the majority of the activity revolved around our standard product, we did create and refine a ratings applet and a scheduling applet for them that allowed them to easily rate and review applications.   We had originally created them for managing applications for DreamIt but added considerable functionality for TechCrunch.   I found out during the process that this application would generally be known as an Applicant Tracking Process (ATS).

We are in the process of putting together a nice case study but bottom line it worked great for them and saved them a ton of time.    A link to the press release is here.

Since I started my blog i’ve only posted from time to time for two reasons.  First, many of the better bloggers I enjoy reading post once a day or once every few days and their blog posts tend to be long and thoughtful.   Second, since i participate in a number of blogs (regular, DreamIt, WizeHive) it has been hard to keep them all up, plus of couse doing some twitter posts.

Now that one of our DreamIt 09 companies, Postling, has released a tool to make this all easy to do in one place I’m going to consider a new approach.   While I may post longer more involved posts now and then I’m going to try to post various smaller posts and links as they occur to me and/or I find them on the web.   My topics will be a bit more broad ranging too…putting up short posts on a variety of topics that I read about and enjoy:  DreamIt, WizeHive, our many DreamIt companies, startups, creative business stuff, the stock market, sports, and of course my family.

Lets see how it goes!

Working with DreamIt Ventures companies and other high tech entrepreneurs on their business models and how they can best monetize their business has me constantly thinking about the alternative sources of revenue.

One thing that I have been thinking about recently due to both our DreamIt companies and my work with WizeHive is that people seem to have different mentalities when it  comes to paying for work related items vs paying for entertainment.

As we conceptualize different monetization models for WizeHive, for instance, I take notice of people posting on forums and asking others if they know of a free version of  this or that, rather than paying just $20 or $30 for a productivity or work tool.    Yet, Zynga and many other online gaming companies get people to pay tons of money to buy virtual goods that have no real economic value, just so they can entertain themselves.

That is one reason why this story about Swoopo caught my attention.

Swoopo lets you come in and bid pennies for very high end items.  And if someone out bids you, you can increase your bid…but only in twelve cent increments.     So, for instance, with only seconds to go I’m looking at a screen for a new high end laptop that is currently bid at $87 and a Wii that is currently bid for $1.56.

But the beauty of what they have done comes next.    Since you can only bid in 12 cent increments, the prices rise very slowly as people bid against each other…which is OK…except every time you bid they charge you .60 cents. And, if the clock is ticking down with just seconds to go…and a new bid comes in…the auction gets extended.

So, while you may end up winning that $1500 TV for only $300, there had to have been 2500 bids to get to that $300, meaning they collected $1500 in bid fees plus the $300 winning bid to sell a $1500 TV!   I’ll take that model anytime!

And what is interesting is that once you have spent an amount – say  $12  - bidding (20 bids),  I think there is a natural inclination to not give up until you have to…so you don’t end up wasting that $12.

In some ways this reminds me of the games that you see at Carnivals or fairs.    You pay $3 for 3 balls to knock down the cans, or for 3 darts to puncture the balloons.   Meanwhile, if you win, the prize probably cost them .50 cents … so if you win they win and if you lose they win.

I think the beauty of both models is that at the core level it is entertainment.    As the article describes I’m sure it is easy to sit there and keep bidding something up for the excitement and thrill of it, even if in the end you wind up with a good deal not a great deal because of the fees.

I am very fascinated to see where this goes and how long before others copy the model and instead of charging .60 cents, charge .30 cents, and instead of .12 cent increments, allow .20 cent increments.     But either way this is an incredibly creative revenue generating model and something to keep in mind while you build out your own site.

Its not that often I can share 2 lessons based on a visit to a fast food restaurant for lunch but in fact I can do that today.

One is that in the startup world those that succeed usually need a good or great idea bundled together with good or great execution and it is in part those two factors that determine to what extent an idea or company will succeed.   The other is the old adage of “under promise and over deliver.”

So what’s the story?

I don’t watch TV that much any more but the other day I caught a Wendys commercial about their new Boneless Wings.     Since I try to watch what I eat (a hazard of getting older) and I also try to watch my carbs what appealed to me was a fast food restaurant offering what looked like grilled marinated chicken without the carbs.

This is what the ad looks like:

So today while running some errands I stared to think about lunch and  noticed a Wendys so I thought I’d give it a try.

When it’s my turn in line I order the Asian Sweet & Spicy ones shown in the picture above.   I’m thinking it will come out something like fast food Chinese chicken does… grilled with some marinade sauce on the top.   Fairly low cal (other than the sauce) and tasty.

Instead I watch the woman behind the counter scoop up what looks like a bunch of  chicken nuggets into a black plastic container, pull out a plastic squeeze bottle, squirt some sauce into the container, put a lide on, and then shake it vigorously for about 10 seconds, then put it on my plate.   I have to say I was a bit shocked, otherwise I would have told them – never mind.

I got back to my table and although this is not my picture (found it on the web) this is what it looked like:

After taking a bite it was in fact their chicken nuggets (or as someone else on the web commented, something similar to their old chicken strips) with some sauce squeezed on top.   Worse yet I looked at the board and 5 chicken nuggets with sauce cost $1.19 at this location.    I counted 8 pieces of chicken in here and it cost $3.99!    More than 3 times the price!

In general, I like Wendys.   I don’t eat there much but if I need some food and there is one around I’ll get burgers or Chicken from time to time and like their salads.  But this has to be one of the worst executions of what could have been a good idea…and worse in my opinion one of the worst cases of mis-setting customer expectations I have experienced in a long time.

This year we are using WizeHive to provide a collaboration space for all of the DreamIt teams to share ideas, questions, best practices, etc.   There was a recent entry made by one of our 2009 DreamIt companies about their level of preparation prior to meeting in the last few days with a local VC.

It made me remember one of my favorite personal stories; that of the $2M dog biscuit.

In the early 1990’s I had a company called PTS Learning Systems, which at that time was a provider of classroom based technology training (we later morphed multiple times before we sold the company in 1999).   PTS was doing well.  We were growing rapidly and profitable and were cash flow positive.   I wasn’t looking for funding but after studying information on direct marketing we began an aggressive promotional strategy which included sending out materials about every 6 weeks to a locally grown database of customers, key contacts, and local funding (VC) sources.   We sent out our schedule, press releases, customer success stories, etc.  on a rotating basis.

It helped grow our business but interestingly about 4 or 5 months into the program, the day after a flyer was sent, I received a call from someone with Safeguard Scientifics.   At the time they were THE hub of high tech activity in the Philadelphia area.  They were very bright and very progressive and their leader, Pete Musser, was a huge pillar behind the technology community in Philadelphia.    They asked if we were looking for funding.    We talked for a while, I said we didn’t need funding, and that was that. 

Six weeks later our next mailing went out.   Once again, the phone rings a few days later.    Same person.   Are you sure you are not interested in talking about funding?    Having done a little homework in between I said…”well I don’t have a business plan pulled together but if you can arrange a meeting with Pete Musser I’d be happy to come in and talk about whether it makes sense for us to create one and go down the funding path.”

Within a few days we had a lunch scheduled at their offices.  In between I put in a considerable amount of time learning as much as I could about Safeguard and Pete and one thing that stuck out was that wherever Pete went…so did Sam, his golden retriever.   So much so that at one point Sam was part of a statue they had when you walked into Safeguard.   I guessed that Sam would be at the office the day of our meeting.

So the big day arrives and I meet Pete for the first time (who was/is a great guy) and we sit down in his conference room for lunch along with one of the firm associates .    I grab my turkey sandwich and they grab theirs…. and then Sam meanders into the room.     As Sam walks by, I reach into my suit pocket and pull out the biggest dog biscuit I could find the night before at the pet store.  I ask permission to give Sam his lunch and then hand the biscuit to Sam.

About four months later I had a $2M investment from Safeguard and one of their funds (and I’m happy to share that when I sold my company about 7 years later I was able to return about $10M.) 

I never actually asked Pete whether the biscuit influenced his decision but I know we had a great meeting that day; they even offered to coach us through the process of building the business plan!  Sure we had a good company-  and a good story – but I’m convinced that taking the time to study and prepare made a huge difference in that meeting.

Of course today it’s even easier to do research before meeting someone for the first time.   If they are a VC, find out what sort of businesses they invest in, what niches, what are their hot buttons, what sort of personal interests they have, etc.     I know that when I am interviewing someone for a job or interviewing companies for an investment their willigness to take the time to do their homework, think through some questions, and otherwise be prepared has at least a subtle influance on my opinion.

And  of course, don’t forget to bring the $2M dog biscuit!

Between my activities with DreamIt Ventures and my investments as an Angel investor I will by the summer have a stake in more than 30 startup companies. As I described in my prior blog post, when finding the right investment it is a necessity to have a really great idea and a really great founder or team. And as part of that I like to try to understand who I am investing in; what kind of person are they. Will they listen? Accept suggestions? Work hard? Do whatever it takes to succeed and/or survive?

One way I learned years ago to understand people was on the golf course. Before I became a dad and became active in DreamIt and WizeHive I had time to golf.   And, after selling my first business, I golfed a lot for a few years. Mostly with friends, but sometimes with business associates. I found that you could really learn a lot about a person on the course in 4 hours when you played golf with them.

How did they react to a poor shot? Did they stomp and hiss or take it in stride? When they were on the green were they aware of everyone else and where their balls were…or did they step all over your putting line? How did they treat the others in the group? Did they enthusiastically compliment someone when they made a great shot? If you had a small wager, how did that affect their play?

My young daughter was off from school this week and being a reformed ice hockey player I took her ice skating one day. Back in the fall we went 4 or 5 times in a month during which time she used rental skates and got progressively braver and was skating without my help. Then over the holidays someone bought her new skates. When we went skating in February she kept falling because her toe pick kept hitting the ice and for the first time ever she wanted to leave early. She also made excuses why she shouldn’t go skating again until I pushed her a bit this week.

When we took the ice this time she held firmly onto my hand for the first 30 minutes or so, which is not her normal independent way of doing things. Slowly I loosened my grip so I was barely holding her hand and after a while I pointed out she could probably skate by herself. So she tried…fell a few times…tried some more and by the end of the session was quite proud of her new found skating ability. So much so that since we were the last two on the ice she wanted me to skate in opposite directions and meet her at the other side before we left the ice.

It made me think a little that any activity gives you a good sense of a person and you should find ways to do them with someone before becoming a partner with them or an investor in them. Take ice skating. When they fall, do they get right back up? Do they hover near the boards or do they race out into the middle and take their chances? Are they cautious about other people skating around them? I find that all these little things add up and can tell you quite a bit about someone – much more than you can learn about them while sitting at a conference room table.

After reading through a few hundred DreamIt applications this weekend it occurred to me that there was a fairly simple and repetitive process I went through while reviewing the applications – and that my approach might provide some valuable insight to those applying to DreamIt or programs like DreamIt.

My approach may be different then that of my partners at DreamIt and may be very different from the approach taken by the folks at YCombinator or TechStars.    Nevertheless, I think having insight into one decision makers thought process would be helpful (or potentially scary).

Let me also share that when you have hours, not days, to run through hundreds of applications your first pass lasts no longer than a couple of minutes.

So…what do I do?

The first thing I look at is the first couple of sentences of the idea.   This typically allows me to mentally categorize this into one of 4 categories:  (1) Not a fit at all for DreamIt (someone opening a restaurant), (2) this doesn’t look unique or scalable (we are creating an online social network for {fill in the blank}), (3) this looks unique and interesting but I don’t quite grasp it in a few seconds or (4) Wow! I get it and it sounds cool.    Probably  one in ten hit category 1, maybe one in twenty hit category 4 and the rest are somewhere in between.

For all of those but the Category 1  I next jump down to the people.   For those that are in Category 2,  I am looking for a reason to justify keeping the application alive.   Suppose I see an idea that I think is good but on first pass does not look unique.  Suppose further that I see 3 or 4 really strong people listed in the application.   Great backgrounds, great schools, prior successes.    In this case I will most likely go back to the idea and try to figure out what they see that I don’t.   So a great team keeps the ball in play and may allow the application to get to my next stage.   On the other hand, if I see an application submitted by one person or two with little or no relevant background that application gets moved into the “no” pile.

For a Category 3 application (looks interesting but I don’t quite get it) I’m again looking at the people to guide me.  A good team will most likely allow them to at least get to the next stage.  I’m going to err on the side of assuming that even if I don’t get the idea after my first quick read – there might be gem in there somewhere…I just need to uncover it.    A one person team or a 2 or 3 person team with no relevant experience will most likely cause me to read the idea one more time just to make sure before I’m not missing something good before I move it to the “no” pile.   

For Category 4 applications and those from Category 2 or 3 has made it to the next stage I will now take more time to digest the application.   I already have decided there is a nugget of a good idea here and that there is a good enough team to support the idea.   Now I want to dig in deeper.    How much do I really like the idea?  How competitive is the market?   Is there a unique twist they have put on the idea?   Do they have a prototype demo?  Do they have a functioning web site, and better yet one with increasing traffic?

I try to access and weigh all of those factors to decide whether to recommend to my partners that we interview these candidates.   As my partner Steve Barsh would probably write, I am now also looking to understand assumptions and risks.    The risk with a great team and a great idea but with no demo is they have not proven they can build the product yet.   Meanwhile, a good team with a good idea that has a functioning product (web site, for instance), and can show traffic growth and happy customers, has eliminated some significant risks.

So…what is my advice if you are looking to DreamIt or one of the other programs for seed stage funding?

First, think through your idea.   Make sure you are able to explain it clearly and that there is something unique and special about it.    You may only have a few sentences to catch someone’s attention.   Second, at the very least put a prototype or mockup together to help the reader visualize what you are thinking about.   Third, make sure you have a great team. 

As an example, I had three entrepreneurs reach out to me in December or January (before our applications were open) and explain their idea.    In each case it was one non technology guy with a web services idea.   I told each of them to user PowerPoint, Photoshop or anyone of a number of online tools (Balsamiq for instance) to create a mockup or if possible a working demo.   I also told each of them find a developer or technology team.   Now, just a few days before we make our final selections, lets look at what happened.   One of them created a great prototype and built a team consisting of two new technology guys.   I already liked his background and his idea and among other things it showed me his ability to listen and displayed his tenacity and drive.    The other two?  Neither have made any progress in finding even one technology person to add to their team and neither have fully answered some of the business questions I initially posed.   And neither of them will be in DreamIt this year.