What works – STR Skill School and YouTubing

What I’m listening to as I type: Mojave

 

There’s a lot of guff and puff being written about YouTubers at the moment.

If you took in much of the stuff in the media this year you’d think top Youtubers arrive fully-formed, like baby seahorses, with their million subscribers and six-figure earnings. But, to borrow from JPG, the formula for YouTube success is rise early, work hard, strike oil.

Actually, the “rise early” bit might need to be swapped for “stay up late working”, but the work hard bit and the striking oil bit applies. YouTubers’ “oil” being find to the right niche, meme, trend or format and then have the talent, passion and personality to  sell it.

This way to YouTube Partner Programme

This way to YouTube Partner Programme, baby

Most of the top independent YouTubers have been slogging away at it for four plus years: Smosh eight years; SB.TV seven years; TomSka six years; Rooster Teeth five years; Dude Perfect four years.  PewDiePie, currently top of the lot, is a relative Tube baby with his three-year-old channel. These guys have had time to build an audience and to get better at entertaining it.

When Steve Roberts set up his YouTube channel  STRskillschool in 2010, he was running football coaching classes six days a week to earn a living. He thought he could use YouTube to post clips of the techniques he taught his students so they could carry on practising between lessons, but he struck oil when he realised there was a bigger audience out there for his videos:

“I was looking at YouTube and saw most of the [football] stuff was pretty poor, so my idea changed to ‘how can I reach the world with this?

“I thought: I’m just the average guy, I know what everyone wants. But then I thought, if I know what the masses want, how can I utilise that?

“There were no language barriers because I didn’t talk in the videos. So I started making videos once a week or more.

“That was 2010, World Cup year, and the site starting growing really fast. I stumbled across the right format and trends.”

One of his early successes was a video of him showing how to take a free kick like Ronaldo.

“The Ronaldo free kick was quite a trending topic at the time and still is now – four years later the video is still doing well.”

Four years later, Steve is doing well too. His channel is nudging the half-million subscribers mark and he is “living comfortably for sure” from running it fulltime.

stryoutube

His channel is the biggest independent UK sports channel on YouTube. In November 2011, he was the only UK winner in the YouTube Next Trainer programme (collecting £5k worth of production equipment); in April 2012, YouTube nominated Steve as one of their rising stars and, in August that year he was picked to produce his channel from the Olympics.

YouTube have been “really supportive” of him – when I interviewed Steve, he’d just got back from a YouTube-arranged sports event linking vloggers and sponsors and a few days later he announced a big tie-in with Vauxhall, the sponsors of the England football team.

“I’m pretty fortunate in getting a lot of offers from brands but I have to be selective. It has to be right – I have to cater for my audience. I could make all the money but if my audience think I’m a sellout then I’ll lose subscribers.

“Sports brands make sense but it has to be a natural, organic thing. It could be  something to do with food and drink, or the brand might have a player they’re sponsoring and that might be an opportunity for me to work with that player.”

Working with ‘name’ players is something he wants to do in the future:

“It’s time to bring the skills videos to the next level by including the footballer: how to learn to play like Neymar with Neymar, or Zidane with Zidane – that would be my ultimate aim.”

Also on the cards is to buy in some help. Like most YouTubers, his channel is just him – his ideas, his camerawork, his editing, his deal-making. Him replying to comments, tweeting, blogging, promoting…

“If you’re the [on screen] talent you have to have a passion for the subject and you have to be knowledgeable about it, Fundamentally you’ve got to love what you’re doing.”

Loving what you’re doing is what keeps the best YouTubers working during the early years. Steve remembers coaching during the day and staying up each night answering comments and working on his channel.

When I first started it was really hard. My children were very young and I was working late at night answering comments. I chose to answer every comment, and now it’s got a little bit more difficult to do that but you’ve got to be engaging, and you’ve got to use social media.”

strlogoThings were just getting going for him when, in July 2010, he tore his cruciate ligament in his knee:

“I thought my YouTube career was over. Even at that early stage it was growing so fast and I was shattered when I was injured, I thought: ‘it’s all over’. But the subscribers kept me going, and the support I got from them.”

For Steve, passion and expertise drive the best YouTube channels and, for him, one other thing: visual awareness.

“I’ve always been a visual teacher and learner – I was good as a coach at showing information and good as a kid in quickly picking up skills I saw. I found that works on YouTube.”

What also works on YouTube is picking the right subjects for videos and giving them the right title – not just in SEO terms but to get viewers to watch.

So, his “Insane” skills videos get double the views of his technique training videos, and his training videos with player names – Neymar, Ronaldo, Beckham, do 20/30 times better than the ones without names. More of his videos now feature other footballers, rather than just him.

“I always knew that if I could utilise other skills I could improve the channel.

“Before, when I filmed some of the [football] freestylers it was in the YouTube studio, but when I filmed Andrew [Henderson], I said ‘I can’t do this in the studio’ so we just walked around London and I would say: ‘can you do something here?’ and ‘can you do something here?’ and his talent was so good it worked.

“If someone told me to pre-plan a video I don’t think I could do it, but if I turn up at a location I can tell you exactly where to shoot something and come up with ideas when I’m there.

“Then I had to find the right song to pull it all together.”

The song – and the freestyler videos, were inspired by another YouTuber: devinsupertramp. Steve’s other YouTube heroes Dude Perfect (“the biggest channel for me”)  joined him at the Olympics YouTube fest.

It’s that understanding of how to engage his audience that works for Steve: “If I’m getting bored watching a video, I know that viewers will be so I just cut out all that extra stuff.”

In this, his second World Cup year with YouTube, he’s expecting a big bump in views and subscribers:

“The next target is half-a-million subscribers – then the key one is one million and I hope I can hit that this year.”

Nike and Adidas are “being supportive” and he’s hoping the World Cup will also help him take that next step in bringing international players to his YouTube channel. Will he be going to Rio too? “Oh, I’d love to go to Rio!”

Thanks, Steve!

Thanks, Steve!

 

What did (and didn’t) work in app launching – London Cyclist

What I’m listening to as I type: Days Are Gone

Way, way back when both me and the web were younger and altogether more excited about each other, I believed the internet would deliver The Dream Job. That one you do from your laptop sitting on a hot beach drinking something cold.

I was thinking about that when I spoke with Andreas Kambanis over Skype at the weekend. If anyone’s realised the promise of the web to deliver dream lifestyle plus dream job, it’s him.

AndreasKambanisAndreas started the successful London Cyclist blog straight out of uni back in 2010. That led him to launch a string of apps, starting with Bike Doctor, and all of that led to him building his business as he travels from Vancouver to Antartica, and back again.

When we spoke, he was in sunny Buenos Aires (“My favourite place so far – it feels like Paris, with cafes on every corner”) and I was in storm-battered Tutbury.  (Three cafes, doesn’t feel anything like Paris).

He told me running his business remotely has worked just fine:

“The biggest problem has been my laptop power failing in Buenos Aires. If I’d been back London I’d have just hopped on my bike to the nearest Apple store, buy a cable and then come back.

“Here I visited three different Apple stores and none of them had the cable,  so I had to get on a boat to Uruguay to buy one!”

Aside from power fails, finding a wi-fi connection can be an issue (“Now I just use Airbnb and rent an apartment with private wi-fi”) or he makes use of his 3G stick and phone (“crucial in Peru when we were launching the London Cyclist app“).

He launched the blog as a hobby first, while working in his first job after graduating. Launching his own business was “always in the back of my mind.”

“I wanted to do my own thing. I was working for a company for a year but it was a graduate job and I found it very frustrating.”

He picked cycling as the topic for his blog because he was cycling to work every day and saw there wasn’t much online about cycling in London.

Getting the domain – londoncyclist.co.uk, was important for search traffic then: “Back in the day it was very important what domain you had – it’s less important now.”

As the blog gathered views, he started contacting other cycling sites and blogs and monetized the site with affiliate product links.

It took me about six months to be earning about $3k a month. Then my first big breakthrough was round about the time Apple brought out the iPhone 3GS. Immediately it was clear that this was a real opportunity – with the iPhone I could have everything inside an app.”

His first foray into apps was Bike Doctor, which teaches cyclists to fix their bike.

“I contacted a developer with the idea for Bike Doctor. He did the coding and I did the marketing and brought the audience. It was a 50/50 partnership.

“The app went to the top of the category for sports apps in the UK – it did really well straight out the door.”

His next app – London Cyclist, was less successful with sluggish sales.

“I hired a developer this time and spent around £2.5k making it and got that back within a few days.

“But I quickly realised that London Cyclist could only grow to a certain stage. I made the assumption that other people would want what I wanted [in a bike app]. Secondly,  I assumed that iPhone was the right format.”

His market – his London Cyclist blog followers – just weren’t that interested in the app: “If the London cyclist doesn’t download the app, whatever I did I wouldn’t move sales very far foward.”

Andreas has written here about his decision not to invest more time and money in trying to push that app forward, but  said it was a valuable lesson:

“But with each failure you learn a lot, so now I know about creating an app that’s got location data in it and I can use that for other ideas I’ve got.”

He was already traveling by the time the London Cyclist app launched, having set off on his journey in February 2013. His next app, Caveman Feast, was also created and launched as Andreas crossed continents.

Via a contact of a contact he was introduced to Abel James, who runs the very successful Fat Burning Man blog, podcast and brand based around promoting the Paleo diet.

Andreas suggested the app idea to Abel and designed and launched it. On day one of launch it had had 8,000 paid-for downloads and got into the iPhone top ten:

Top 6 app in the Apple App Store

The key had been to partner with someone who brought his market with him. Abel’s Fat Burning Man podcast gets over 500k downloads a month.

Paleo expert George Bryant of civilisedcavemancooking.com, was also involved and recommended the app to his 90k followers. By the end of launch day, the app had made back its £7k developer cost.

“Partnering with other people that have followers is key. Making an app yourself is really hit and miss. In the past we’d have had to contact all the major media outlets and find out who to talk to and chase them.”

That pattern – of working with ‘names’ to build apps, is where Andreas plans to take his business this year.

“A lot of very successful people are very busy so that’s where I come in and I manage the whole process. I take their content and four to six weeks later I deliver the app and the launch strategy.

I never launch an app and hope for the best, I always have a plan for how to get it out there.

“A digital agency in London would charge you around £100k to produce an app but you could do it for £7-8k but you need the strategy. I really think through the app and the visual mapping of the content.”

His next app is due to launch early March. It’s a 14-day juicing challenge, again working with a ‘name’ partner. Like Caveman Feast, it’s about people  building new health habits into their normal routuine.

“I’m really interested in the intersection between psychology and healthy eating so I’m interested in how we can bring thoughtful design in an app to make healthy living easier.”

This year, he expects to take someone on to manage the London Cyclist blog fulltime while he concentrates on building his app business. But does he think about where the tech is going – what he does after apps?

“Yes. Especially in the tech world everything changes and its really tough to stay ahead. I think wearable tech is next and we’re already looking at that and looking at using Google Glass for the recipe market.”

Thanks for talking, Andreas!

Thanks, Andreas!

What usually works: storytelling

What I’m listening to as I type this: Thirteen Tales From Urban Bohemia

I was watching a bunch of my students pitching their ideas for new web businesses, and found myself thinking about the Great British Bake Off.

I’ve only ever watched three episodes of GBBO, and the gap between the first and third was a couple of years. But what struck me most was the style gulf between the two – the step-up in terms of storytelling.

Which is how come I was thinking about the TV programme while I was watching journalism students pitch. Because the thing I remember most from learning to pitch myself – back when I was in VC-hunt overdrive, was that the best way to present the problem your product is designed to solve, is to explain it through telling a story.  Uber-VC Fred Destin said that.

Easy-peasy, lemon-squeezy – storytelling is what being a journalist is about. We “people” news stories, we add walk-you-through structure; hook-you-in intros, and wrap-up conclusions.

My strongest pitch started with the (real) story of the news story I wish I’d never put on a front page, and why that led to me launching two open publishing products. I would tell her story and show her picture:

Not saying whoIt would be wrong for me to retell her story here. But my aim was to illustrate why I was doing what I was doing and why I believed it was important to help people write their own stories.

I still believe that. I haven’t changed my view that a good journalist is an enabler of truth, not a director.

Anyway, I’m drifting away from the point here. Which is  that storytelling delivers a narrative shorthand that helps us to explain and to sell ideas.

It does so not because we’re natural storytellers – some are, some learn how to be; but because we’re natural story listeners. We learn about and make sense of the world through narrative. Perhaps increasingly so as we tell stories across more and different media.

I’m going to quote from Robert McKee’s  ‘Story’:

The world now consumes films, novels, theatre, and television in such quantities and with such ravenous hunger that the story arts have become humanity’s prime source of inspiration, as it seeks to order chaos and gain insight into life. Our appetite for story is a reflection of the profound human need to grasp the patterns of living, not merely as an intellectual exercise, but within a very personal, emotional experience.

McKee’s seminal book on the principles of screenwriting was published in 1999 – ten years after Berners-Lee invented the web and the same year a 15-year-old Mark Zuckerberg (aka “Slim Shady”) launched his first website.

McKee, Berners-Lee, not even Slim Shady Zuckerberg, would have imagined the billions of stories being shared across 1.37+ billion web pages today. We present the story of who we are (or who we want to be seen to be)  by sharing what we’re doing.

Here’s another picture and another story:

TGBBO's Ruby TandohGreat British Bake Off finalist Ruby Tandoh wrote a combative comment piece for the Guardian, about the “bitterness and bile”, “vitriol and misogyny” tossed casually at her and fellow GBBO contestants by some public and press.

Ruby acknowledged the “meticulously manufactured” nature of TV but may not have realised what “manufactured” means in terms of storytelling when the aim is to deliver McKee’s “personal, emotional experience.” When storytelling engineers an emotional response in the audience, should it be a surprise when that emotion spills over into the real world?

Boyd Hilton, TV editor of Heat magazine explained it thus:

Obviously the producers shape [GBBO] to give each contestant an identifiable personality….  It’s up to the people who make these programmes to create the stories and give us an idea of how they feel the personalities come across.

Anita Biressi and Heather Nunn, in their book Reality TV: Realism and Revelation, explain the success of Reality TV as “the exhibition of the self” wherein a revelatory narrative instructs audiences in “how to manage the self” through  recognisable subjects (ie people types) dealing with personal crisis.

The need to hold our attention within the time limit of the programme leads to a narrative shorthand of confession and emotional revelation in order to convince the audience of the authenticity – the ‘reality’ – of the stories being told.

Ruby becomes the weepy one, Kimberley the automaton, and Frances – well Frances delivers “integrity” (read authenticity). Each baking challenge is a typical action-through-conflict scene, and, just as all stepmothers are witches and all Princes handsome, each woman in the (any) group can only be one Spice Girl.

If the point of storytelling is to make an emotional connection between story and listener, or protagonists’ ‘story’ and the listener/viewer, what is the point of storytelling in relation to my students’ pitches? Why am I linking the Bake Off to the pitch off?

Because storytelling – narrative – is a shorthand to making a connection with your audience. Doesn’t matter whether that audience is 8m viewers, 1m readers, three VCs, or one grandchild.

Jack TV

Jack controlling the story arc

Stories have an arc. That arc is defined as an absolute value change –  the frog became a Prince; the soldier gave his life;  eventually, she won. McKee describes the core of a good story as a “fundamental conflict between subjective expectation and cruel reality.” We wanted this, we got that.

A good pitch includes a value change story arc that tells us how things could be better. It also includes – like reality TV – reference to the ordinary: this is something ordinary people will be changed by; this is a product recognisable people types will use to solve a problem.

You see a real cool girl in a class and you want to know what other classes she’s signed up for so you can sign up too… students go and look up other people and find out who they know, who their friends are, what people say about them, what photos they have… This is information people used to dig for on a daily basis, nicely reorganized and summarized… You don’t miss the photo album about your friend’s trip to Nepal. Maybe if your friends are all going to a party, you want to know so you can go too…

All stories Zuckerberg told in Facebook’s early years to explain why ordinary students would use it; the problems it would solve, and the value change it would deliver. Or how about Reed Hastings’ story of the $40 late fine for returning a video that led to him launching Netflix – an ordinary event, a problem we recognise and a solution we can therefore understand.

I’m going to finish with McKee on pitching business ideas through storytelling:

The… much more powerful way [to persuade people] is by uniting an idea with an emotion. The best way to do that is by telling a compelling story. In a story, you not only weave a lot of information into the telling but you also arouse your listener’s emotions and energy. Persuading with a story is hard. Any intelligent person can sit down and make lists. It takes rationality but little creativity to design an argument using conventional rhetoric. But it demands vivid insight and storytelling skill to present an idea that packs enough emotional power to be memorable.

 

tell-me-a-story

 

What didn’t work: Sweeble

What I’m listening to as I type this: Dead & Born & Grown

I’ve been putting off writing this post for half a year. Tying my tooth to a slamming door would hurt less.

This post is me saying, finally and publicly, that sweeble is over. My big publishing idea; the web-tech start-up I’ve led since 2008, is kaput. And probably always was.

Even the sign I’ve been driving around for three years is looking weary:

Fading sweeble signSweeble was (and I’m pretty certain still would be) the UK’s only web to print self-publishing platform, built so anyone could create their own proper printed newsletters, magazines and booklets. Everything was done online in sweeble; from writing stories, to laying out pages, to ordering printing. More useful than Blurb. I wanted to build a WordPress for print.

Anyway, it turns out it never really worked. Worse its browser dependability meant it never really would work without being rebuilt every couple of months.

In a nutshell, I made three fatal errors.

1. I contracted the wrong developers.
2. I didn’t manage the development process forcefully enough.
3. I got distracted by new stuff instead of being a one-project entrepreneur.

There are other bits I could have done better – like getting more publicity, or focusing on one market channel at a time, but they didn’t kill sweeble, just slowed things down.

And if the funding we were offered had panned out, maybe I’d have been able to pay new developers to build me a stable version of sweeble.

Weeping woman - Corbis
However, clouds and linings and all that, there are things the sweeble experience has taught me. So here’s my advice to anyone paying someone else to build something new:

  1. Your developers are not your friends. You don’t need them to like you.
  2. Contracts can help you think through the project responsibilities but are largely useless if it goes wrong.
  3. There are reasons why the thing you want to build doesn’t already exist and one will be that it’s really difficult to build. Expect problems.
  4. Concentrate on building the simplest, sharpest one-trick pony and don’t waste time and money adding every widget you dream up.
  5. The first time your developers miss a key deadline, stop the project (and payments) until you understand why and agree next steps.
  6. The second time they miss a deadline, start looking for other developers. Just in case.
  7.  Have a cut-off point in your head (time and money) when you’d be willing to cut your losses. Don’t keep spending just because you won’t walk away from what you’ve already given.
  8. Don’t leave project management to the developer team’s manager. Get weekly reports, daily reports if things are going wrong; ask questions and talk to the developers. You’ll never wish you got less involved.
  9. It isn’t about just getting to beta release, it’s about launching a product lots of users can use without tearing their hair out – just ask MySpace.
  10. Allow at least one third of build time for field/user testing. You need to be sure the product works when the developers have gone.

wizard-of-oz

Aside from lessons in what to do differently next time (if there is one, I’m still feeling a bit raw), what else have I learned from sweeble’s demise?

This: it’s time there was a registration authority overseeing and regulating the work of software/app developers and engineers.

In the UK we’ve got gazillions of trade bodies and quangos regulating work and standards on behalf of consumers.

There’s somewhere to go if you have a complaint against the bloke who laid your carpet or fitted your double glazing. You can check whether a dentist, solicitor or company director is OK or dodgy. You can get support if the firm that sold you your holiday goes bust or you were miss-sold a pension plan. You can find a certified gas fitter, engineer or electrician.

But you have no way of knowing, other than by word-of-mouth, whether the developer/s you’re about to spend thousands, or millions, of pounds with can do what they’re promising to do.

And, no matter how much you spend on lawyers and the contract, if the developers don’t deliver, you’re pretty much buggered.

Software project failures are difficult to prove in court (is it “goods” or “services”?) You’re looking at a lengthy process involving paying court costs, solicitor and barrister – and even if you win, the developer/s can opt for bankruptcy (or Chapter 11 protection in the US) and not pay you a penny.

It’s like me taking my car to a garage and not being able to do a thing about it if the mechanic decides square wheels would work better than the round ones I wanted.

squarewheeltruckThere are trade bodies for software engineers and developers but these are member-centered – serving the interests of the developer, not his or her customer. There are no codes, standards or regulations that can tell me, the buyer, whether I can have any confidence in the supplier’s ability to deliver.

The global software industry is worth around $350bn (Lucintel). The ICT market in the UK alone is worth £140bn and software and IT services make up £58bn of that. For comparison, that’s almost three times what we spent in the UK on getting our cars fixed.

My point being that this is a big and growing industry on which other businesses are increasingly dependent for their own growth, so why is it unstandardised and unregulated?

We celebrate the scale of spend in the software industry but ignore the billions lost on sub-standard work or delayed delivery.

When the NHS scraps a £12bn software project that “never worked”, we blame the customer not the supplier. ComputerWorld’s ten biggest software failures in 2011 demonstrates even New York City and Idaho can’t get back the hundreds of millions of dollars the authorities lost on failed software projects.

We’ve known, even before Brooks’ seminal Mythical Man Month that most software projects go wrong because of poor project management but we continue to believe that can be corrected with a contract and sharing Excel reports. We need help to get what we’re paying for.

My losses were in the tens of thousands rather than the millions, but it isn’t the money that matters, it’s having to draw a line under a good idea that should have worked. That really hurts.

One of the magazine templatesRIP sweeble.

What didn’t (and sometimes did) work. Part 3: publicity

What I’m listening to while I type: Return of the Grievous Angel:

Number three on my list of  five things that make web-tech start-up success more likely is ‘Twitter chatter isn’t enough, good press and advertising last longer’.

I spend more time than is probably good for my career in the pub four doors from our home. 

Me and hubby will sit in a particular corner and, because the landlord controls the TV remote, we watch a lot of sport and in particular a lot of La Liga. Aside from developing an awe-struck appreciation for the genius that is Messi and a schoolgirl crush on the sparkliness that is Balague, I’ve also noticed just how much of Sky’s ad space is bought by internet-based businesses.

It made me think about the value of traditional press publicity and non-digital advertising to digital businesses. Or why you need old-school media to make new media businesses really successful.

Online ad spend first overtook TV spend in the UK in 2009, and will overtake TV spend in the US this year or next (depending on your choice of analyst). Yet earlier this year, analysts were pointing to a bit of a bounceback for TV advertising led by web businesses including Google. And multi-media companies like Gannett have seen a 38 percent hike in TV ad revenues, albeit boosted by the Presidential battle and the Olympics.

“The biggest way to attract mass is still television,” Estée Lauder Chief Executive Fabrizio Freda told reporters at a briefing in New York in April.

So, if you’re a web company with a product already used by a billion people, and investors eating their children to have a share of your expected future earnings, what do you spend cash on?

Telling us Facebook is like a chair.

If you’re the world’s biggest-earning web business, where do you place a third of your ad budget? Into TV. And when you’ve got a great new product no-one uses, where do you tell people about it?

Google spent $1.5bn globally on advertising and promotion in 2011, over 4% of company revenueand, along with Apple and Amazon, has one of the highest ad-spend growth rates. There’s a great infographic here.

Here’s a game we can play. I’ll run through a short list of successful UK web businesses and see if you remember their TV ad:

Wonga
Asos
lastminute
Betfair
Bet365
Moshi Monsters
Wiggle
notonthehighstreet
Lovefilm

And, while you’re thinking about advertising, had a LoveFilm mailshot or a notonthehighstreet catalogue drop through your letterbox recently? Twenty-five-percent of spend on postal mailshots comes from home shopping businesses– and if that’s not what Lovefilm and notonthehighstreet are about, I’m a monkey’s aunt.

Yes, you can grow your business at speed if you hit the jackpot on a Facebook frenzy or Twitter trend spike, but it won’t be enough for long enough. You need press coverage in the early days and cash to spend on advertising once you’re growing.

I get a spike of roughly an extra 2,000 views each time I tweet about a new post on wreckoftheweek, more if it’s retweeted. But that’s digital peanuts compared to the spike a mention in a magazine delivers.

My point being that this is stuff you can do yourself for free and that makes a big difference at start-up. Press coverage, listings, forums, social media, search-engine-optimised content. It’s about hours and hard work, not marketing magic.

Basically, you need to work out where your potential customers are, go find them and say ‘Hi’.

hiGetting the press to notice you is the hardest bit. Like VCs, they move as a pack so one tech reporter writing about you generally leads to another interview.

What works in most business start-up reporting is a positive story focused on firsts (eg your software is doing something new), or numbers(eg investors have chipped in a nice big figure) or milestones (eg hitting a nice big user milestone). And with a feelgood personal story about the founder/s thrown in. Here’s an example of all four in one Guardian story: Songkick raises £6.3m in funding round.

With my start-ups I was generally pretty ok at getting initial press interest and web chatter but not so good at keeping the interest going (ran out of ‘first’ and ‘numbers’).

However good you are at attracting free publicity and web chatter, eventually it comes down to spending money on traditional advertising. Which means making money or attracting investors. Facebook may not need to advertise for more users, but it does need to use advertising to scrape off some of that studenty-stalkery-privacy-dodginess attached to its brand.

I’m going to wrap up with something from research by McKinsey earlier this year. Note the last sentence:

The results revealed that advertising fueled about 15 percent of growth in GDP for the major G20 economies over the past decade by generating new business. While some companies launched unsuccessful media campaigns and did not recoup their costs, such failures were outweighed by the companies with strong campaigns that increased sales, attracted new customers, or improved margins. On a microeconomic level, introducing digital media to the advertising mix helped companies increase their revenues, market share, and profit margins to a greater degree than traditional advertising alone. (Notably, digital media produced its effect by enhancing the impact of print and broadcast ads, rather than by replacing them.)

What did (and didn’t) work in ecommerce

What I’m listening to while I type: Born To Die

If the trick to web-tech entrepreneurial success is to keep trying and tweaking the same model until you get it right, then Boyd Carson is getting it right.

I spoke to him about his e-ventures and his thoughts on ecommerce ventures in particular.

As a partner at Sapphire Capital Partners, he launches bespoke investment funds for clients in property, renewables or anything else: “picking the right products for the clients to invest in.” As Founder of Sapphire Ventures, he runs his own start-ups, focusing on niche ecommerce products – most recently weselljewellery.com

It’s his fourth ecommerce-led venture. Two failed, one (Where Wise Men Fish) was a success and he sold it on. He launched We Sell Jewellery four months ago.

What I found particularly interesting in our conversation was the technique he’s developed out of this experience. Basically picking a niche product; focusing on getting to know that product and that market; and testing it first with just a couple of products and landing pages before committing.

It’s a low-cash, ultra-fast way of testing an idea on a market before you start building a beautiful website or weaving your business plan. I found myself wishing I’d spoken to him before I spent months building lovecocktails.co.uk (twice) and then finding our extensive product list was a logistical nightmare.

However, back to Boyd. He’s launched two jewellery sites and two fishing-related sites – isn’t that a bit of a bizarre mix, I asked him?

“It’s about trying to identify a niche market. Trying to identify somewhere where one can add value to the process. Everyone was rolling up hotels but no one had seriously looked at fishing lodges.”

When he replied to my Linked In appeal, he said he’d seen a lot of people getting ecommerce ventures wrong. I asked him what mistakes he thought they were making?

“Not doing enough research on the product to begin with, spending a lot of money upfront doing the website, spending all the money upfront without knowing the product.”

He added that was an issue for any retail business but was particularly the case in ecommerce:

“People assume ecommerce is easy but actually it can be harder because there’s so much competition on the web.
“It’s about knowing the product and the market – does the market want the product? And also the market may want the product, but can you get it to market with enough margin to make a profit via the internet, because the internet is so competitive?
“Someone may want to buy, for example, a gold necklace. We may assume there’s a market on the internet for gold necklaces but the competition is so fierce that the only one who survives is the one selling it the cheapest.”

Hence Boyd’s strategy of focusing on niche markets. His second jewellery site has focused on niche and custom-made jewellery.

However, the assumption would be that luxury goods, such as jewellery or exclusive fishing holidays need investment in a website and marketing – don’t customers expect a certain look and feel to the website? Boyd thinks not:

“You don’t need a big website to launch. You do test pages to test your product quite cheaply. You don’t have to spend a lot of money to test a product and get some feedback.
“For example, if I had a budget of £500 I could do an adwords campaign and spend that as a way of testing the market, rather than spending £5,000 and putting everything up there.”

Of his two ventures that failed, he felt going for a market that was too niche, too small (fishing flies?) was a reason for failure, along with not having enough cash to back the business up in the early stages, “and probably I didn’t know what I was doing”.

I asked him whether having had a business fail is a positive thing?

“Yes and no. It can be very dangerous, an entrepreneur with a small capital base can easily blow the lot and then its game over for them.”

So what advice would he give to someone planning an ecommerce startup?

“Research the product and don’t run out of cash. Have plenty of cash stashed away and don’t blow it on sales and marketing before you’ve tested your product.
“I’d also say that networking is very important because it’s a very lonely process starting a business and to talk to other people in a similar position can reassure you that you’re not failing, and they can offer you ideas and help”

And the most important thing?

“The overriding thing is focus wins. Keep focusing on what you’re doing otherwise you’ll never succeed.” 

 

Thank you, Boyd.

Thank you, Boyd.

 

What didn’t work – Geomium

What I’m listening to while I type: B.R.M.C.

Ben Dowling is one of those bright, young entrepreneur geeks that Cameron gets super-excited about  [er, that doesn’t sound quite right. Ed]

At 28, he already has one web-tech launch behind him and is currently working on at least two others. That first web-tech project, Geomium, was the one I spoke to him about – after he replied to my tweet call to tell me he’d definitely worn the t-shirt!

tweetWhat I found especially interesting talking with him was that the reasons he gave for why he felt Geomium had, ultimately, failed were ones I recognised from my own experience. In particular, the need to stay focused on your original concept, especially when you’re at that point where funders are biting. Anyway, background first.

Geomium was a social app focused on location. Developed by Ben and co-founder Michael Ferguson out of six months of conversation, prototyping and brainstorming that started in the summer of 2010. 

Mike (left) and Ben. Picture - The Guardian

The two hadn’t worked together before Geomium but had a shared interest in location and in the excitement being generated in 2010 around what location could add to social networking. Ben said:

“Initially, the  idea me and Mike had was very social, just around people and what they’re up to. But we thought, if we just have people then we need the critical mass of people and how can we get people to use it until we have that critical mass? So it was always location based – chatting but with people nearby, location was critical.”

Remember that Summer 2010 was when location was still pretty new. Foursquare had launched  at SXSW the year before – as did the rival it beat, Gowalla. But these were then US-centric and, while there was plenty of work and excitment around location, the space in mid-2010 was still pretty open.

Ben and Mike raised £33k of Angel investment, enough for them to give up their day jobs and concentrate on launching Geomium (as an iPhone app and website) and to start looking for the next stage funding that would make the difference between go and stop.

The product was getting good press and interest from VCs. But by Dec 2010, the Angel cash that had kept them working on it fulltime on had pretty much run out:

“We needed to raise more money around December 2010, Jan 2011. We were slightly unsure what to do with it [Geomium] at that point so originally decided to take on other projects and keep pushing this forward, but it’s really difficult to do it when you’re not fulltime because you get distracted and it’s not a priority.”

It wasn’t just the lack of funds that was impacting on the project at this point, but the pressures that come with the pitching process itself, particularly how the desire to reflect the VCs’ interests can add to that loss of focus.

I remember my own, increasingly desperate, pitching phase and how that hunger to get a funder on board would affect what I thought about my product, and I began reflecting what I thought the VCs wanted. Ben said this had been “a huge problem” for them too:

“We were pitching end November through December [2010] and in January we were part of Seedcamp pitching to five VCs at once. Before that you’re pitching to about one a week and getting feedback from that and so you change the pitch, and then the next week you do it again and get feedback and change it again.

“Then the next week at Seedcamp you meet different teams and they all give different feedback but there was always a common thread. By the end of it you end up with their personal passion, one will say one thing and the other the opposite – although it’s not relevant to us they just say it to everyone.

“But afterwards you realise a side point, not their main point, is a common thread that they all made and that’s the important bit.”

The “important bit” in Geomium’s case was to stay focused:

“They [the Seedcamp VCs] said by bolting more and more onto the product we might think we were making it more compelling but we were actually confusing users.”

For Ben and Mike, the space Geomium was competing in had filled up since they started 12 months earlier. Their response to that had been to add more features to their product:

“The initial idea was to focus on people but then it was “how to we do more? I know, let’s add events and deals.” There were lots of different apps coming onto the market that offered each of those parts but we decided to add them all: “Let’s add this, let’s add this. Oh, someone else is doing that; let’s add that too.” So you end up doing a mediocre job of lots of things rather than focusing on one thing and being the best at that.”

The pitches failed. The guys didn’t raise the extra funds they needed to progress Geomium. Ben summarised what they felt had gone wrong:

“When we first started it was obvious it [location] was going to be an interesting area but 12 months later, when we were looking to raise money, the space had really filled up. It had become increasingly competitive and a lot of the investors wanted to see some serious traction. We had good traction but not at the levels they liked to see and the reasons for that are because we did too many things.”

Ben started working on other projects as lead developer. Some apps, including BusMapper, but  mostly working for another promising start-up – Lightbox, an Android photo app  (has $1.2m VC investment and is currently in Series A fundraising round). Mike returned to the US and is now working on another location-based project – appthegame, with new partners.

Geomium is still running as an events listing website at www.geomium.com (the events route being one the guys had started to focus on towards the end), but Ben “pulled the plug” on the original website and mobile app at the start of December 2011.

But, as Ben explains himself on his blog coderholic: “Failure isn’t anywhere near as bad as you think it might be. Even when everything goes wrong, it’s actually OK.” (Incidentally, this BusinessWeek feature makes the point that ‘failing is actually OK’ in multi-million-dollar businesses too).

So, if Ben was mentoring newbie start-ups at Seedcamp 2012, what would advice would he give them?

“I’d say focus on one thing and do that really well instead of doing too many things. I think it’s a really, really common thing startups get wrong is to think the one thing we’ve found isn’t good enough, so let’s add more stuff. But really you need to focus on the one thing.” 

 

What didn’t work. Part 2: funding

What I’m listening to while I type: Let England Shake

“I love this idea of wrong thinking – of encouraging people who have ideas to go see if they work and not dismissing them just because they sound like the wrong solution. No one has the right answer at the beginning. I made 5,127 prototypes of the bagless vacuum before I got it right.” James Dyson

So, and in case you hadn’t yet spotted it, there’s a page on this site called ‘What didn’t’. Right now it’s just a handful of web-tech ideas that didn’t last, written up as a list. What I hope to create eventually is a database of great ideas that launched and folded – Dyson’s “wrong thinking” legacy.

 @duncanburbidge  pointed me to Techcrunch’s fabulous Deadpool, which tags stories of closures and likely closures. It’s an interesting list but difficult to work with in terms of useful data.

I want the information in the WWWD database to be a) written by the founder/s who were there at the birth and death of the project to provide valid qualitative data, and b) structured so that it can be interpreted by researchers (I’m still working on that, suggestions appreciated).

Anyway, this post is part two of my look at the things that I believe make web-tech start-up success more likely, based on my experience of things going wrong. Number two on my list of five critical things is:

2. Don’t only spend your own money.

It’ll cost you to launch your own web-tech business. You’ll have to spend some of your own money, maybe a lot of it, but my advice is that if you only spend your own money it will fail. You need investors.

I left newspapers in 2006 to work on my first web-tech project, a user-generated news site. Since then I’ve launched Sweeble (web/print self-publishing) and a couple of traditional websites.

But over five years, I’ve only earned about £7k in salary from all these projects. My time for the last four years has been paid for by working part-time at Staffordshire University, teaching web-based journalism for c£17k pa.

The most I earned in newspapers was £35k pa, in 2002 when I was managing editor of a bunch of Northcliffe’s thisis… local news websites. Allowing for the fact that my salary dropped when I went back to the newsroom ‘proper’ as news editor, I could still expect to have earned around £30k a year had I stayed in newspapers and not gone all entrepreneurial on myself.

So far I’ve lost around £75k in salary over five years.  Potentially more if you add that, when I worked for the man instead of myself, I was promoted most years (I’m a bright woman – just clearly bad at being an entrepreneur).

But let’s stick with that figure of £75k as theoretical lost earnings. That’s one cost of my investing time in my several start-ups.

The other is a bit more direct. I’ve also put £18k of my own savings into my business, and expect to put in a further £5k in this financial year. And I owe £10k to family investors that I’d like to think I could repay one day.

So, cost to me of spending five years trying to get my web-tech start-ups to fly – £108k.

I mentioned investment.

The Government has invested in me and my bright ideas with two R&D grants in five years, totalling £27k. Thank you Tony and Gordon.

I’ve had private investors interested several times, had meetings with Angels and VCs and, in 2010, had an offer and term sheet on the table from Midven Ltd for £255k.

However, the issue is not about me chipping in cash myself vs spending someone else’s money, it’s about the importance of investment, and in particular Angel and venture capital (VC) investment in making it more likely that a start-up will succeed.

There is plenty of academic research in this area (I’ve quoted from a little of it) and the research shows three things:

1. There’s a link between Angel/VC  investment and growth for start-ups. Researchers disagree on whether this is primarily linked to VCs ability to ‘pick’ winners or ‘coach’ them:

“Although prior scholarship uniformly associates VC investment with positive outcomes for startups, this relationship is predicated upon two distinct mechanisms. VCs may be able to identify, preinvestment, those startups that are particularly likely to exhibit superior future performance, thus picking winners… Alternatively, VCs may provide postinvestment management expertise and connections, thus building winners” (Baum, Silverman, 2004)

2. VC investment in start-ups is not necessarily based on evidence of prior growth. Nor, despite what VCs say, is it about the quality of the founder/s:

“Given that venture-backed startups grow faster than their non-venture backed counterparts, we examine whether this distinctive growth path is already identifiable before the first round of venture capital funding. Our results indicate that the growth path of venture and non-venture backed firms cannot be distinguished before the former companies receive their venture funding.” (Davila, Foster, Gupta, 2003)

3. VC investment “signals” quality to other investors and makes further investment more likely. VC funding tells other agents in the network that a start-up is worth supporting:

“VC firms implicitly decide the survival and death of start-ups by choosing which of them to fund… By investing or refusing to do so that signals the level of risk for each start-up and indirectly modify the risk evaluation and the behaviour of the other agents of the system.” (Ferrary, Granovetter, 2009)

Basically, if you get VC cash your tech-web start-up is more likely to attract further investment and more likely to get to market ahead of competitors.

Let’s add some figures to that .

VC funding accounted for 21% of all investment in UK firms between 2000 and 2009. However, there have been year-on-year falls in VC investment since 2008 and investment is around a third of what it was in 2000. The first quarter of this year saw a 4% drop in UK investments and, in the US, the  fall has continued into Q3.

Alongside the fall in investment, a 2010 report by Nesta identified that seed and first round funding had been hardest hit with VCs concentrating on re-investing in their existing portfolio, or focusing on later stage companies.

The report also pointed to a fall in the number of exits; an increase in the length of time taken to exit; and increase in firms needing more rounds of funding before reaching the exit stage.

There’s a nice outline of that process in Robin Klein’s post on TAG  about his involvement with Fizzback from first investment in 2005 to this year’s $80m exit sale. What you see is the close personal relationship between investor and founder and the ‘coaching’ role  Klein took on as first investor. He writes:

“Our relationship with Rob Keve, Fizzback’s founder, goes back about 15 years and we invested in IMI (Instant Market Intelligence – its former iteration) in 2005 – as part of the company’s small seed round. I well remember the 4 hours Rob and I spent driving to and from the Cotswolds every month during 2003 for the board meetings.

“Its initial vision was to address demand for rapid market research and new forms of customer insight – kind of vox pop via SMS. Selling a product to the market research community didn’t seem to me to be a place where we’d find good sized budgets. Rob had another much more appealing idea which he was running in parallel. A service to retailers and service providers which enabled consumers to provide feedback at the point of experience – in store, on the train etc – via their mobile phones – via SMS… This latter idea got me excited. I agreed to invest and join the board as Chairman.
 
“Rob and I pulled together a small group of angels – including Jonathan McKay – and what a great decision that was! Jonathan, who is a real enterprise software/services guru, took over the Chair in 2008 and helped Rob build the stellar sales team and been an invaluable guide to the business.
 
 “Step one back in 2005 was hire a small team… Operations head was Jonathan Morris (my son-in-law) – still the Operations Director of the group, often holding things together …. another reason for the soft spot for this company.”
Back in 2006, Robin and Saul Klein (I’ll return to their importance in UK tech-web) considered investing in my user-led news start-up. They didn’t in the end, but our paths cross again – Robin put me in touch with Richard Morross, at Moo, when I was still working out how to move forward on my self-publishing project, and Saul led Seedcamp and picked Sweeble as one of his ‘wildcard’ finalists in 2010.
 
To pull all this together – without investment you will run out of steam.
 
It’s hard to keep going on your own and having (the right) investor onboard does two things.
 
First, it ‘signals’ that your business is better than rest because of that VC’s reputation for ‘picking winners’. That attracts interest from press, other investors and the tech-web networks. 
 
Second, the investor brings ideas and people to the table. As ‘coaches’ they push you and help things happen faster than you could on your own.
 
Investors oil the wheels of your project’s progress.
 
Pre-investment

Pre-investment

 
 

Post-investment!

Post-investment!

 

What didn’t work. Part 1: coding

What I’m listening to while I type: Hunky Dory

I’ve had two failed start-ups and maybe I’ll have more over the next decade, so I have a vested interest in understanding what makes it more likely that one web-tech start-up will succeed and another one fail.

I’m hoping the research I’ve begun will come up with answers born out of the sweat and tears of entrepreneurs, investors and helpers who have been there and worn the start-up t-shirt. However, I’m going to get the ball rolling by talking about the things that my own experience has taught me.

Starting a web-tech business is like starting a band. You might play some gigs and get a decent following, but the likelihood is that within a couple of years you’ll have split up, given up, or reformed as a tribute band.

But… a tiny few of you will start selling records CDs downloads, and a smaller number will get a contract, and an even smaller number will get some Radio 1 airplay, and a tiny, tiny number of you will become Adele.

It’s like dreaming of winning the lottery, but winning because you’re actually good at something, not because the tooth fairy said your £1 would be the one. It’s not (just) about the money, it’s about standing in the sunbeam of peer recognition.

I digress. Where was I?

Ok, these are the five things that, based on my experience, I believe make web-tech start-up success more likely. There’ll be different and hopefully better lists as I talk to some of you and, if you’ve got suggestions, do feel free to comment or get in touch.

My list below might see obvious, but obvious doesn’t mean do-able. If there was always a direct link between us knowing what we needed to do and actually doing it, we’d all be a lot more successful and the planet wouldn’t be dying around us. So, my list:

  1. Do your own coding (at least to start with)
  2. Don’t only spend your own money
  3. Twitter chatter isn’t enough, good press and advertising lasts longer
  4. It’s the business model, not the business plan, that matters most
  5. Don’t get distracted.

I’ll cover the five over this and the next four posts. Here’s number one.

1. Do your own coding (at least to start with).

I can’t, and I really believe that’s the main reason my last start-up sank.

Expecting programmers to build something in code that you’ve drafted in Word, Excel, or as a notepad scribble – not good.

Not understanding programming languages well enough to be able to tell a) whether that’s a great programmer or great bullshitter sitting in front of you, or b) whether they’re standing at a coding crossroad and might be about to chose the road to obsolescence  –  also not good.

Not understanding the job of coding well enough to know how long you can realistically expect a programmer to take to do that “tweak” you thought of last night as you were falling asleep. Not good.

I’m not the only one who thinks being able to code matters for web-tech entrepreneurs. Here’s Fred Wilson,  of Union Square Ventures, saying the same thing earlier this year:

“Be technical, get technical, or find people you can be business partners with who are. Even if you are not going to do these things by yourself, it’s helpful to learn. It’s better to learn it to talk to technical people, and to evaluate if somebody technical is good or not.”

Stephan Schmidt, of blog codemonkeyism and his own failed start-up, puts “write code” as his number one advice to CTOs of start-ups. While serial entrepreneur David Cummings, blogs that every CEO should learn to code because it will make them “a better leader”. For reasons that include:

‘”You understand the technical architecture and trade-offs of different product decisions. You can call B.S. if a technical person pushes back on something being too difficult/time consuming.”

Being able to code, even a little, means being able to sketch your idea in a way that programmers will be able to follow and run with. It means being able to cobble together a working demo of your idea and be talking to possible investors, while every one else is still writing the brief and interviewing developers.

It means being the pack leader of your technical terriers.

Cesar MilanPlus coding twists the brain, in a useful way. Twitter co-founder Jack Dorsey (talking to Lisa Chow) gave a programmer’s perspective on why they had to come up with the name Twitter before they even started to code the concept:

‘CHOW: At the point that you decided on the name, how much of the idea of the company had been already discussed and decided?
DORSEY: I really wanted a name before we started work on the code because if you don’t name the code the same thing, then it becomes extremely confusing and then you have go in and rename all these variables and all these functions, and it’s just a mess. So I wanted the name before we even started work.’

And in case you wondered, Evan can code too. And obviously Mark, and Larry and Sergey and Bill and Dennis and … (although the other Mark can’t so I do need to interview him).

So what do you do if you’ve got the ideas but not the code skills? I’d suggest looking these options: