Hi. This is Nabeel Hyatt. I've started several companies, most recently Conduit Labs. I write about building startups, virtual goods, music, and social gaming. more +.
30
Oct
Just wrote a piece for Techcrunch on predicting the success of a product, the over-dependence on virality, and the nefariousness of Best Buy — all in one compact little post. Plus charts!
19
Oct
A little while ago Brad Feld turned me on to the book The Amazing Adventures of Kavalier & Clay. Basically, it’s a book, about comic books, that is about entrepreneurship.
I have no idea if this passage is going to translate for those that have not read the book, but it is as good a piece of startup advice at the early idea stage as you’ll hear. The context is that the two main characters, Joe & Sammy, are discussing what kind of superhero to create in the heady days just following the launch of Superman. To translate, think about that energy around creating a social network a few years ago, or a social game right now.
“And no matter what we come up with, and how we dress him, some other character with the same shtick, with the same style of boots and the same little doodad on his chest, is already out there, or is coming out tomorrow, or is going to be knocked off from our guy inside a week and a half.”
“So…” Sammy said. “So…”
“How? is not the question. What? is not the question,” Sammy said.
“The question is why?” Joe asked.
“The question is why.” Sammy said, ”Why is he dressing up like a monkey, or an ice cube, or a can of fucking corn.”
“To fight crime, isn’t it?”
“Well, yes, to fight crime. To fight evil. But that’s all any of these guys are doing. That’s as far as they ever go. It’s the right thing to do, how interesting is that?”
“I see”
“Only Batman, you know… see, yeah, that’s good. That’s what makes Batman good, not dull at all, even though he’s just a guy who dresses up like a bat and beats people up.”
“What is the reason for Batman? The why?”
“His parents were killed, see? In cold blood. Right in front of his eyes, when he was a kid. By a robber.”
“It’s revenge.”
“That’s interesting.” Sammy said, “see?”
“So we need to figure out the why.”
” ‘What is the why.’ ” Sammy agreed.
It’s not the how. What is the why.
28
Sep
When we were building Flickr, we worked very hard…a lot of what we then considered “working hard” was actually “freaking out”. Freaking out included panicking, working on things just to be working on something, not knowing what we were doing, fearing failure, worrying about things we needn’t have worried about, thinking about fund raising rather than product building, building too many features, getting distracted by competitors, being at the office since just being there seemed productive even if it wasn’t — and other time-consuming activities.
Caterina Fake - Working hard is overrated - Sept 25, 2009
Startups are hard. They require an insane amount of hard work and stress. But I like how Caterina calls out the difference between freaking out vs working hard.
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21
Sep
What about iTunes? Doesn’t that show people will pay for content? Well, not really. iTunes is more of a tollbooth than a store. They offer a convenient list of songs, and whenever you choose one they ding your credit card for a small amount, just below the threshold of attention. Basically, iTunes makes money by taxing people, not selling them stuff. You can only do that if you own the channel, and even then you don’t make much from it, because a toll has to be ignorable to work.
- Paul Graham - Post-Medium Publishing
From the perspective of Paul Graham’s description, wouldn’t all virtual goods transactions be “a tax?”
They seem to follow the pattern PG sets up with the iPod. Create an audience that is highly engaged in your product (such as Apple’s iPod, or a social game or MMO) and then offer a convenient set of additional content (music in iTunes, new items in Pet Society, new music and clothing in Loudcrowd). In that case, I’m not sure how you would argue that “even then you don’t make much from it” because there is a preponderance of evidence showing the opposite.
The lifetime value of a paying customer in these models is anywhere between $100-$200. Indeed, well performing social games are charging a “tax” that results in $.50-$1 per average daily active user a month. PG has investments in the space so I’m sure he’s aware of these numbers.
The lesson is not that digital content won’t sell, but that there are different types of digital content — and some won’t survive. There are particular characteristics of the $1b+ in music sales revenue in iTunes. Instead of dismissing iTunes as an abberation, we should study those characteristics, because they are replicable. Hardware is not even a mandatory trait, just a highly dedicated and engaged audience, along with some of the other conditions I’ve discussed in the past.
04
Sep
TUMBLR PARTY! Adding the 1/2 of this list I wasn’t already following. Nice work
Flattered to be included amongst an excellent group. Nice little community forming here, eh?
The company was on the rocks. We had zero revenue. We had been trying for four years to make something work. We were out of ideas.
One can never be reminded enough of the “long and winding road” that startups take. Thanks for sticking with it Alex & Eran. We’re looking forward to playing Beatles at the office.
01
Sep
Only at Google would “near future” just be an estimate. If you want to kill Google, it’s pretty simple, try adding customer support.
27
Aug
The Wall Street Journal has a good piece, based on Christian Chabot’s blog post, about how long it takes to build a technology empire.
Turns out it takes an average of eight years to hit $50m in revenue, which is about the point when you can start thinking about things like going public. And this is for the top 100 largest software companies, so we’re talking about the biggest winners here. One of the most valuable companies ever founded, in any industry, in any country, took 8 years to hit $50m in sales, Microsoft. Oracle took 10. Locally I often point to the timelines of successes like iRobot and Harmonix and the time it took them.
But hey, let’s say you’re still trying to hit the obviously unrealistic five year projections of a typical venture capitalist (unrealistic only from a purely factual, statistical basis you understand), what’s the fastest way to the top?
Thankfully Tableau’s study breaks down the companies by market segment… so I did a little extra simple math. Here were the averages for how long it took to hit $50m in revenue by market segment:
Network (Rackspace, Echelon): 10.6 years
Security (Symantec, Sourcefire): 8.2 years
Database (Netezza, Oracle): 8 years
Content Management (Adobe, Digital River): 7.5 years
Entertainment (Activision, EA): 6 years
Feeling impatient? Don’t start a networking company, start a gaming company. Of course, this is a limited study and breaks with our deep-seeded need to be working on “serious stuff.” But it’s actually not just historical, it seems to be repeating itself right now. At least three Social Gaming companies founded post 2007 will be, or already have, hit $50m in revenue in their first three years of business.
The interesting dichotomy that the data suggests is this: it will take longer than you expect to hit success, and building fun might actually accelerate that path.
10
Aug
While the members of the Beatles camp may not be avid gamers, they are savvy navigators of culture and commerce. With music sales in a freefall and radio’s clout on the wane, the vibrant video game industry is a prime source of exposure.
31
Jul
Comprehensive look at the tiny design changes that add up to mattering in conversions, great overview
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