Cerdafied...startups, people & the variety Hour

Well, with so many people blogging about startups and the how-to's, this blog isn't as necessary anymore. (Although thousands of people still seem to come by here so who knows). I feel like telling my Myspace story next, but I'm still deciding if that's worthwhile;) For now, my honeymoon with NYC has ended, and it's game on for the next quarter. Meantime, while on the train the other day I began to think of things that make up a good product guy, and began to tweet them (attached).

Announcing VEVO's new product head

When I was 9 years old commercials started airing about a new TV channel for music videos. The commercials were clips of rock stars saying "I Want My MTV.”  And so a music revolution was born.

Over the years, music videos would take on lives of their own and would bring about an unprecedented sentiment for music. Music became more visceral and cerebral at the same time. And for artists, music videos became a standard; a must-do in conjunction with any new release or live concert. It became a deeper means of expression and promotion at the same time. 

By the mid 90s, while making music in my spare time, my day job focused on building out network elements that make up the Internet - focusing on Internet access devices, remote access servers, and routers that enabled high speed Internet service. Shifting gears, in the 2000s, I was building various communications services, most recently launching Cc:Betty/Threadbox, - which I sold to MySpace last year.  As part of the sales transition, I stayed on at Threadbox as the company was converted over to a product called Myspace Threads and to work on other products, including Events and Artist Tools. It was really fun applying my work to an environment so focused on the artist/fan connection. 

As my tenure was drawing to a close with MySpace I started thinking about what my next move would be. Most people who know me assumed I would start another company and I almost did, but something else was cooking that captured my attention and ultimately my focus… 

I have always loved music videos and, while the world itself has evolved music videos are still here and being watched online by gazillions of people each day - on computers, phones, tablets, and other connected devices. The access layer is amazing!  But, what the world of music video still needs is a service layer yielding a modern day version of that special sentiment MTV gave us in the early 80s. I'm extremely focused on establishing that service layer and sentiment, which is why I'm jumping out of my own skin to announce that I am joining VEVO!

At VEVO, I'll be heading up Product and plan to build more depth of functionality onto more platforms, ultimately providing the most delightful, compelling, automated, customized and social music video experience ever. It’s my goal not only to usher today's generation into the sentiment I felt in the early 80s, but also rekindle that sentiment among older generations. And I hope to do so in a very contextual way, per platform, per device, per video, per human.

I’m excited to join the VEVO team. Stay tuned for some great new products coming to you from VEVO soon.

 

 

Big Co or Startup...which is right for you?

I graduated Cal Poly San Luis Obispo in December '94 with a four month old daughter (ok she didn't actually graduate with me, but you know what I mean), was married to her mother a month later and left my college job at KFC for good (they gave me a check for $500 as a 'thank-you' for my service) to join a startup doing inside sales. They gave me a Mac with a 9" black and white monitor, a gyne colored cubicle, a yellow pad of paper with a Papermate pen and a Nortel desk phone. Nine months later the CFO of the company pulled me aside told me the lead investor (who was a 'strategic' and major brand for decades) wasn't going to see the company through much longer. He gave me a sticky note with the name of a woman called Rita and a phone number. He said, "Call her, she's be expecting your call. She's looking for a guy like you."

Was Rita an A&R exec ready to sign my band? A scout looking for a half Mexican with a perfectly receding hairline? A call girl? A meter maid? Ok I'll stop now. She was an HR director at another startup with reputable investors with revenues ramping but at a strategic crossroads. I joined Rita's company and ultimately participated in the company's IPO a year later. Then a year after that joined another startup which a year later was acquired by a 20,000 person company. I did about a year at the 20,000 person company and learned I was becoming just a cog, just a social security number in the rank and file. So naturally I joined another pre IPO startup, who like clock work did an IPO about a year later. What sounded so risky [startups] on the outset had paid off. And so went the 90s and the build out of the Internet... 

Not too far into this century came what would become a long, cold, nuclear winter. I joined my boss at a new startup he would take over, and finally - after three great runs in a row, I landed a dud. Granted, had the markets continued to flourish, it had all the makings of a blockbuster hit. When that didn't work out I thought it was about time I take what I'd learned and found my own startup. If nothing else I'd get some great experience and find myself a better place on the cap table for when the markets got back to normal. What I didn't admit to myself at the time, was the great run I had experienced was probably a once-in-a-lifetime thing. After all the odds are typically stacked way against startup success. 

I learned that the hard way when I tried my hand at founding three startups inside of six years. Although a lot was accomplished in those startups as far as innovation and execution, none of them yielded the level of returns I'd experienced in the 90s era startups. Some of it was me, some of it was hiring mistakes, some was the feasibility of the companies, some was market dynamics. On more than one occasion I thought about what would have been, had I gone the route of many of my early colleagues, and work my way up the ranks in a big company. I most certainly would have earned better compensation during the 2000s. But I wouldn't have had nearly the level of breadth, creativity and scrap that I have now. 

I got a call from a recruiter the other day who was sniffing around. (It's always good to keep recruiters up to date on yourself because no one else will). I talked her through the triumphs, trials and tribulations of the last 15 years. And her question to me was "You're a startup guy, what are you doing at a big company?"

That's when I explained to her, like I've explained to my own team, that there are merits to both paths, and your best bet is to diversify your career path based on the opportunities both that present themselves and that you can create within them. For example, my last startup was in a seed stage and in its short term we built a useful product and had 100,000 users. That's notable in its own right because that's really hard to do without spending money to do it. But I sold that company to a bigger company, and now rather than fret about how to grow from 100,000 to 500,000 people using it, I got to refactor and rethink it as it relates to big co, and ultimately launch something into over 100 million users. It's not everyday you get to do that, so you have to do it when you can.

Whether it's a big co or startup, It all comes down to the opportunity you have and can exploit, i.e. the market timing, the funding and/or exit climate, the earning potential, and the risk/reward.

If you're young and getting started and have roommates and so forth, you can play a high risk profile and bounce around from startup to startup and learn a bunch in a short amount of time. On the other hand if you can ride the ranks in a big co you can establish the credibility and scale that could perhaps make you a better in the long run.

If you're an old timer with a family you might prefer the stability and comp of a big co, but perhaps you can find your sweet spot in a later stage startup that is less risky. There are a handful of those companies that have already created significant value but are still pre IPO. 

A lot of people in the industry like to characterize people as startup people or big company people. While you can find success in either, there's no reason you can't be great for either stage or in between. In any case, it's all a matter of your individual situation, dynamic, ambition and risk profile. 

 

 

startups and partnerships may break my bones, but names will...

Anyway, back to regularly scheduled programming...

I haven't blogged on startup stuff in a long while (or about anything for that matter), but I was talking to a startup kid in South Park yesterday about this, then I saw Owen Thomas tweet about some panel on the topic yesterday, so I thought I'd throw down some key strokes on the topic.

Startups (and investors) often times weigh partnerships with a bigger companies much too heavily. 

"If I can only get a deal signed with company X, I'll get all the distribution I need."

"If I get company X pregnant, they'll have no choice but to buy me."

"We're going to get to critical mass with partnerships with x,y and z."

"We're going to launch a stand alone product, but monetize it with partnership distribution."

"We want company x to buy us so we're going to partner with their biggest competitor."

Wrong.

Here are the top 5 reasons why you shouldn't rely/bank on partnerships with incumbents:

1. They operate on a different timeline than you. You're probably trying to create value inflections on a weekly or monthly basis. They're on a quarterly basis, and there are a lot of other fish waiting in line to fry before your thing gets into that timeline. 

2. They operate on a different strategy than you. You are trying to carve out a niche to survive as a company and only have a few months cash runway to do it. They have key objectives to create larger value in an existing marketplace so that next quarter's numbers are better than the prior. 

3. They operate on a different volume than you. You have a beta user base of 50,000 and would be a feature in a tab in a hidden section of their site. They have gazillions of users on numerous pages, tabs, sections, etc. 

4. They view a deal with you as an experiment. They don't want to invest in building what you've already built, not because they can't, but because they don't want to take the time to make it a core part of their strategy just yet; so they'll test a thesis or idea out, using you more or less. 

5. They won't nurture nor iterate like you can. You might iterate a few times per day because you have an agile team, likely of folks that work the whole stack. They have different functional teams at all points in the stack, and they each have priorities of their own, so they simply can't see eye to eye with you on frequency, urgency, etc. 

 

This isn't to say that partnerships between startups and incumbents are useless, rather, you startup types should align your lenses with theirs and deduce an alignment of interests - and work from there as a basis. And don't bank a fund raise or an exit on it whatsoever. Look at it as a step along the way of proving out your thesis.  

 

Threadbox sale final

Dear Threadbox Beta Users,

I owe you an apology.

I sent you a 7-day notice to clean out your Threadboxes as we were terminating the beta program, but I did so with no explanation. Believe me, I wanted to say more, but I couldn’t at the time. We were in the midst of selling assets of Threadbox and the transaction wasn’t complete yet so I couldn’t talk about it. Yet, I knew we weren’t going to be able to continue servicing Threadbox post the sale, so the timing was just funky.

Now that the transaction is complete, I can talk more openly. We sold certain Threadbox assets to MySpace and key members of the Threadbox team moved over to MySpace and are now excited to be part of that team.Myspace and We plan to apply our technology there in a variety of ways! Those of you that were using Threadbox socially may even find what we are building at Myspace interesting!

Thanks for your feedback over the past few months, and thanks for believing in a better way to communicate.  

Signing off on behalf of Threadbox,
Michael  

"So...is this a reeeeeelaunch?"

First off, there's been some confusion about the whole Cc:Betty/Threadbox thing. Cc:Betty was something we began to build on Rails in November 2008 on a hypothesis that a smart email assistant could make email discussions better. It was clever; in some cases too clever for it's own good, however we learned a lot about who cared and why. That led to a forthcoming product called Threadbox, which is a completely, newly built product, using XMPP and jQuery. Threadbox aims to change the way people communicate in workgroups. We want to move people from the fragmented inbox to the harnessed Threadbox. Cc:Betty, Inc is the legal name of the company, but that's changing to Threadbox, Inc to avoid confusion.

I was talking to an industry media/events person the other day who challenged me, "Is this a relaunch?" (said with a negative connotation).

I said, "Well, one man's relaunch is another man's iteration!".

She laughed. But she knew I meant it.

Seriously, the way we should all be building startups is by investing as little as possible to prove a thesis out, and by following the heat. If you can't find any heat, you start over. But if you DO find heat, you optimize/iterate, and yes, in some cases that means rebuilding and relaunching! Afterall, Twitter wasn't a relaunch of Odeo, although it was born there. Yammer wasn't a relaunch of Geni, althought it was born there.

You SHOULD rebuild for scale if your prototype was built with duct tape and you have customers willing to pay you for your product to scale.

You SHOULD rebuild on a better performing architecture if it allows you to better deliver the service your customers you want.

You SHOULD relaunch if there are enough positive differences in the new product.

You SHOULD relaunch if you've found a better way to articulate, message, and deliver your product.

And you SHOULD be proud to rebuild/relaunch for the right reasons. And I am.

The plan is to conduct a private preview of Threadbox to existing Cc:Betty users very soon as well as some folks that have signed up on our Threadbox waiting list. We'll also open the preview up to South By Southwest attendees - I'll be there on a panel called "Email, the next frontier," along with Cisco, Gist, Xobni, Yahoo, and Buzz Outloud and CNET's Molly Wood moderating.

-MC

Technorati Tags: Cc:Betty, cisco, customer development, gist, lean startups, buzzoutloud, South by Southwest, threadbox, xobni, yahoo

Cc:Betty -> Threadbox launch en route (check)
SXSW Details (check)
Demo Details (check)
Social Business Edge (check)
Under the Radar (check)
Microphone (check)
Guitar (check)

Two things I can't talk about...

I'm terrible about blogging when there's something I can't quite talk about yet. It's always that one thing I can't talk about that preoccupies my writing mind. There's been a lot of that this year it seems.

-About a month before Cc:Betty raised it's seed round, we had a biz dev deal with a major media and communications company. The deal entailed a special implementation of our product, to reside nicely inside a communications service, but branded as Cc:Betty. It wasn't going to be for our ideal target audience per se, but the placement was going to be worthwhile. About 12 hours before the product was going to launch and the press were going to cover the story, "big co" called me and asked to slow roll the launch, due to some inter-operational concerns on their end. So I called the press off, and thank God they didn't leak the details. To this day, they've respectfully held the story. In fact, it's been so long now, I'll bet the press have probably forgotten. (And no, I'm not going to reveal this company name). Here was a situation, whereby a tiny startup does a deal with a big incumbent, to attract capital and in the name of early and fast growth, but inevitably something goes sideways within the operations of big co, and the startup gets the short end of the stick. (I've actually experienced this before with the Match-Jangl deal back when, but Match were in constant flux so I could see that coming). This time, there was only positive momentum toward a good deal coming together. We had the right internal relationships and they all said the right things. But then we had to slow roll a few days, which became a few weeks, then months, etc.

The moral of this... Don't ever bank your company on a business development deal in the very early stages. Be YOURSELF first, and once you've done that well, only THEN think about what a partnership would look like. It's counter to a lot of things you'll hear, but trust me on this one.

That leads me to another thing I can't fully talk about....

-Last new year's eve, before we all went our separate ways for our party time, the Cc:Betty team launched our first friends and family alpha. Now, almost a year into the Cc:Betty development and validation stage, rather than nurturing the big co deal and others like it, we've done 96 releases on our core product and mapped almost all of that to user feedback/testing/customer development. (We've also built an iPhone app to mirror it which should launch early next year). We've watched the world of tech communications iterate upon itself, in real-time of course, and we've watched people go gaga over Wave, regardless of whether they know what is or whether they can figure it out (the Google halo effect), and we've watched the enterprise begin to adopt once-thought consumer technologies. Most importantly we've learned a whole ton about who our customers are, why they use the product, what interactions work/don't work, what else they want, and even what they'd pay for. This has led us to the ultimate A/B test.

People always talk about doing A/B tests on different home pages, or even user flows. But seldom is it on an entire product. Yes, we are going to A/B Cc:Betty in its entirety. Crazy? Maybe. One thing's for sure, we'll be a hell of a lot smarter about what the NEXT year is going to look like once we complete this test. This test starts with a very limited, private alpha of "B". Later this week we're going to point some friends and family to "B" to get some of their reactions. (If you're reading this, you're probably friends and family, so I'll be glad to give you a peek. You know how to reach me).

The moral of this, don't get hung up on your first thesis, because with or without you, it's going to change. Data always trumps ego.

Technorati Tags: Cc:Betty, lean startups, customer development, product management, startups

the sampling process...get out of the way!

With Internet products it's always a bonus and in some cases critical to be able to get first time visitors into the sampling process. The sampling process an opportunity to try the product and get some level of gratification and understanding of the value proposition quickly.

In some cases, a product is so simple and intuitive, that the sampling process is actually using the product. In other cases, you have to bend over backwards to make it work. (Note to self: if that's the case, overhaul). For instance, when I was at Jangl, we had this ability to let people talk and text on the phone without exchanging real phone numbers. There was a bunch of geeky shit going on there, but it was real hard to package, position and sell on a home page. So much that we began doing things like this. It's funny actually, but it wasn't funny for long. We finally found a way to simplify the product marketing down to reeling visitors into a sampling process. We had a headline that said "Call anyone, now". And then there was a field to enter someone's email address. No matter who's email address you entered, we'd cough up a phone number. When you called or texted that number, your voice mail or text would be forwarded to that person's email. That person would also get a number to call/text you. There was a bit of a wow factor in it, but all in all it was too contrived. The lipstick and the entire Avon collection was all over a solution that was just too complex.

This time around, at Cc:Betty, we started by saying "Hey, just Cc:Betty on any email and she'll organize and track it". Very simple, and gratifying the first time around. But it was hard to get people to just leave the website and open their email client and write a message and Cc:Betty, all to get into our sampling process. That's a lot to expect. So then we added an START flow from our home page, which people could click and fill out a little form without even having an account. This has served us very well. But that method of sampling, however forward thinking, goes against the great laws of people's expectations. The last thing a startup needs is to get in its own way for the sake of the clever. When 90+% of any web service starts with a SIGN UP link or button, that's what people are conditioned to expect, so that's what we needed to do.

We'll learn more soon enough, but I think the moral of the story is

-the sampling process is important
-but make it as natural as possible
-and bust out the lipstick to make it so, but leave the whole Avon kit behind
-get out of your own way (and your customer's way)
-try stuff, measure, learn and try stuff again

Technorati Tags: Cc:Betty, lean startups, sampling process

bad netiquette or social media?

Scott Yates of Denver New Technology Examiner has been one of the many writers covering the Google Wave hype of the past couple weeks. He's written some mindful stuff about it actually, and had some insightful stuff to say via comments at a WSJ story this week.

It was much to my surprise today when my Google alert for Cc:Betty popup a story from none other than Mr. Yates, citing my company as having bad netiquette. "WTF" I said aloud, and I didn't use the abbreviations. Calling someone's hard work a scam are pretty much fighting words as far as I'm concerned.

An excerpt from Mr. Yates article: "I've written before about Google Wave scams, and even Google Wave scams designed to look like they are helping combat other scams.
Now there's another flavor of scam which has the wrappings of something that could look legitimate: Companies offering help with Google Wave invites that is actually no help at all. I've seen a few, but to my mind the worst offender is CC: Betty, which is actually a legitimate company that has a modestly interesting product.
Whoever is running the @ccbetty Twitter page, unfortunately, is breaking the rules of netiquette.
They are finding all the people who tweet about the desire for a Google Wave invite, and urging them to click a link that just goes back to CC:Betty. It's like they are saying to someone who is hungry: "Hey! Here's something that can help: Go outside and with some chalk write down the things you'd like to eat."

----

And then I commented with: I'm the alleged here. You wrote: "They are finding all the people who tweet about the desire for a Google Wave invite, and urging them to click a link that just goes back to CC:Betty". Respectfully, this is just not true.

We're not a Wave invite scam by any means. A Wave invite scam would mean we're saying "Come get your Wave invite here: ccbetty dotcom". That's NOT what we're doing.

Rather we're simply getting in the conversations. When someone says they're desperately waiting for their Wave invite, we're saying: "Hey, while you're waiting for your Wave invite you might like this service Cc:Betty (and we provide a link). It's not quite the same as Wave, but kinda similar".

Most times people @ back and say "thanks this is cool". And later, many of them tweet about it.

Is this really bad netiquette or just social media at play?

Michael Cerda, CEO @ Cc:Betty"

----
It seems as though Mr. Yates had nothing else better to write about today. This seemed like an attempt to keep alive his ongoing coverage of Google Wave. Perhaps a better story would have been:

"Don't have your Google Wave invite Yet? Here are 5 companies you should check out while you're waiting."

Technorati Tags: Cc:Betty, Google Wave, Denver New Technology Examiner, Scott Yates, WTF