Sunday, March 20, 2011

Developers, developers, developers…developers, developers, developers

If there’s one thing that all fast-growing technology startups have in common, it’s that they’re constantly looking for great developers. Microsoft CEO Steve Ballmer got it right:




My portfolio companies are no exception, almost all of them are looking for engineers in various roles right now. So – if you’re a great developer and you’re living in San Francisco, Edinburgh, Vancouver, Berlin, Cracow, London or Munich (or willing to relocate) and if you want to join one of the best SaaS companies in the world, check out these job postings.


Zendesk (San Francisco)

QA Engineer

Front End Developer

Ruby on Rails Engineer


FreeAgent Central (Edinburgh)

Ruby on Rails Engineer


Clio (Vancouver)

Senior UI Designer

Software Developer


samedi (Berlin)

JavaScript Developer

Ruby on Rails Developer

Integration Engineer


inFakt (Cracow)

Ruby on Rails Developer


Geckoboard (London)
Lead Developer


Propertybase (Munich)

Ruby on Rails Developer


P.S.: If you’re like me and you’re not an engineer I (probably) won’t have a job for you but I’ll buy you a brand new iPad 2 for a successful referral of a candidate for one of the positions listed above!

Friday, February 25, 2011

"Launching a web startup became 10x cheaper..."

The conventional wisdom is that starting a web business is (at least) 10x less expensive today than it was 10-15 years ago. It’s said that a decade ago, you needed millions of venture capital in order to launch an Internet startup whereas today, thanks to open-source software, cheap hardware and new ways to acquire users for free (in particular virally via Facebook/Twitter and with SEO via Google), you can do the same with a small fraction of that. And that, while great for entrepreneurs, makes it difficult for large VC funds with many hundred million dollars under management, to deploy their capital because startups ask for less money.


I’ve heard it dozens of times, from VCs, founders, bloggers and others. It’s almost like a mantra, part of the Web 2.0 creation myth, which everyone believes without challenging it. I always wondered if that theory is true, because it didn’t cost Christopher Muenchhoff and me more than about $100 to build and launch DealPilot.com in 1997. That, approximately, was the cost of one month of shared hosting, and in the second month, revenues paid for the hosting costs already. The first “big” investment was our own server, around $3000 as far as I remember. We did raise some money to expand the business later, but that was much later – around nine months after launching the service. So it clearly was possible to launch a state-of-the-art web service back then with little to no investment. DealPilot.com wasn't the only one, of course, I'm just using it as an example.


When I say “state-of-the-art”, I mean state-of-the-art based on 1997/1998 standards, of course. That's what was needed to be competitive. We of course wouldn’t have been able to build a video streaming site à la YouTube for $100 (hardware and bandwidth was too expensive), and launching an online shop would have been more expensive too (Magento didn’t exist yet). That’s logical, but trivial, and not what the theory wants to say, right?


In other words, I think the theory surely is that “starting a web startup in 2011 that is competitive in 2011 costs 10x less than it cost to build a web startup in 1998 that was competitive by 1998 standards”, right? (If the theory was “starting a web startup in 2011 that is competitive in 2011 costs 10x less than it cost to build a web startup in 1998 that was competitive by 2011 standards” that would of course be true, but I think it wouldn’t mean anything. Being competitive by 2011 standards (often) means that you need an iPhone app. In 1998 there was no iPhone. Get the point?)


And that is what I’m questioning.


Now, if the theory is wrong and it wasn’t that much more expensive to build a web business back then, why did startups raise so much VC at the end of the 1990s? One possible answer is simply “because they could” (and because everyone else did, and you didn’t want to be overtaken by better-funded, faster-growing competitors). Fuelled by a crazy IPO market, there simply was an incredible amount of venture capital available. Maybe that’s the real reason, or at least part of it, why it now appears that launching a web startup was so expensive in the 90s. What do you think?

Friday, February 04, 2011

Geckoboard – Your Business in Real-Time

I’m thrilled to announce that together with Robin Klein at Index Ventures, Dave McClure’s 500 Startups fund and my friend and former Atlas Venture partner Alexander Bruehl I’ve made an investment in Geckoboard. Geckoboard is a beautiful real-time status board that lets businesses keep an eye on all the indicators that matter to them.

It’s a bit like “Pageflakes for businesses” (although “Chartbeat for everything else” is probably a better analogy), which is one of the reasons why investing in Geckoboard was a pretty easy decision for me. Another reason is that Geckoboard will be provided as a web-based service, with a free trial and a pay-as-you-go subscription model. Exactly the kind of SaaS business that I’ve developed a focus on in the last two and a half years. Another reason was the huge demand for the product's beta invitations (one of my favorite requests for a beta invite is this tweet, but there are many more). And of course the fact that the company was founded by an extremely sharp guy, Paul Joyce. Yes, a lot of reasons.

I also have a strong bias for startups with websites and applications that look beautiful because I think that's crucial in a world of consumerized enterprise applications. The talent and the experiences to create software that looks and feels great is rare and probably under-rated, but Paul and his team have it. Check out how awesome Geckoboard looks, no matter if you view your dashboard on a large wall-mounted screen, a computer monitor, an iPad or an iPhone.

Tuesday, January 11, 2011

To ask or not to ask (for the user's credit card), that is the question

I've just answered a question on Quora and thought it might be worth cross-posting it here. Just in case there's still someone who isn't using Quora yet (admittedly unlikely given their current growth rate which is absolutely incredible).

The question was:
"For web apps, is it better to ask for the credit card before their trial starts (e.g., on the signup page) or after their trial expires?"
My Quora answer follows below.

* * * * *

I don't know the answer, and there probably is no general answer, but I recently put together a little model that helps to understand the determinants better:

Click here to open the Google spreadsheet

The blue values are sample (dummy) input values that you can change. The model is based on the following ideas and assumptions:

  • There are two types of visitors: Those who sign up whether or not a credit card is required (let's call them Group 1) and those who sign up only if no credit card is required (Group 2). There is of course a third group, those visitors who don't sign up in neither case, but we don't need them here.
  • If you require a credit card you have a certain visitor-to-signup conversion rate from the users of Group 1 (cell D8 and D32). And per definition, no signups from Group 2 users in that case (D33). If you move to a no-credit-card signup, on top of the signups from Group 1 (D9 and E32) you get a certain amount of signups from Group 2 users (E33) so your total visitor-to-signup conversion rate is higher (E34).
  • Looking at the trial-to-paying conversion rate, let's assume there's a baseline conversion rate of Group 1 trial users in the CC-required case (D12 and D38). If you remove the CC requirement I would expect that rate to drop (D13 and E38), because a) trial users who have provided their CC already may feel higher 'pressure' to try the product within the trial period, they feel more 'invested' and are less prone to procrastination; and b) doing nothing is easier than actively terminating your account. Some users will forget to terminate or just don't care.
  • Looking at Group 2 users, again of course no signups or customers in the CC-required case. In the no-CC case you'll be getting a certain amount of trial-to-paying conversions from those users (D15 and E39). I would expect that rate to be lower than the baseline conversion rate because Group 2 users are, on average, inherently less interested in your product than Group 1 users (more tirekickers).

So far so good. You can see the number of paying customers for each of the two cases in row 40.

The next thing to look at is churn, i.e. users who cancel after you've charged them at least once (I'm using charged-at-least-once as the definition of a 'paying customer' in the model):

  • I would generally expect the churn to be higher in the first few months following conversion to paying because some users may still be in their 'extended trial period', even if they're paying already. Also, the longer your customers use your product, the more value they will hopefully derive from it so they get less and less likely to cancel (D19 vs. D 21).
  • In the CC-required case I would expect that difference in early churn and later churn to be higher, maybe much higher, because many of the users who forgot to terminate within their free trial will terminate within the first months after subscription (D18 vs. D20).

Using the data on customers, churn and your revenue (or gross profit) per customer per month you can now calculate if you're better off requiring (D48) or not requiring (E48) a CC upon signup. One last factor that I've included is the cost that it takes to serve a trial user, e.g. bandwidth and time from your support team, which may or may not be significant depending on the nature of your business.

There are of course a couple of caveats:

  1. The sheet is completely useless until you've tested it and until can fill it with real data. The purpose of the model is NOT to replace real-life testing by making some assumptions and pretending that that lets you decide which option works better. Quite the opposite – the purpose of the model is to understand which parameters you should look at and measure.
  2. The model doesn't include all factors which may be relevant (their relevancy depends on your business, and I didn't want to make it too complex). For example, one question is if you consider tirekickers an asset (because even if they're not interested in buying your product yet, they may tell their friends about it or come back to you later) or a burden (because they divert resources away from the more strongly interested prospects). Another factor that I haven't included are different pricing plans – I've included just one price per customer per month.

Feedback very welcome!

Monday, January 10, 2011

Portfolio Update Part 4

Here's the fourth and last part of my 2010 portfolio update. The first three are here, here and here. The last (but definitely not least) update takes me back to Berlin, which is not only home to my portfolio company Momox, covered in the first update, but also to another great company that I've invested in together with XING-founder Lars Hinrichs: samedi.

samedi offers a SaaS booking and resource planning solution for doctors in Germany. In some ways, samedi is doing for physicians what Clio is doing for lawyers – provide an easy, secure way to manage your practice from any device that is connected to the Web. Using samedi, physicians and clinics can also easily offer their patients a way to conveniently make appointments online, 24 hours a day, 7 days a week. samedi also allows healthcare providers to optimize their practice workflow using a simple ERP solution and lets practices, health insurance companies and other players in the healthcare industry collaborate online.

Bringing the healthcare industry, which at least in Germany is pretty old-school and bureaucracy-ridden, into the Cloud age is a very tough nut to crack but there's a huge reward for the company that pulls that off. And if there's anyone who can do that, it's the founders of samedi, Katrin Keller and Dr. Alexander Alscher who have the relentless persistence (and the ability to do with very little sleep) that is necessary in that market. After a slow-ish start in 2008 and 2009, samedi started to take off in 2010. Having grown revenues six-fold in 2010, samedi is now used by more than 2,000 physicians and other health practitioners to manage more than one million patients. Thank you, Katrin and Alex, and on to a great 2011!

This was the last part of my little series. My other investments have not or not yet been announced, but expect to hear some exciting news pretty soon!

Tuesday, January 04, 2011

Portfolio Update Part 3

Here's the third part of my 2010 portfolio review. If you're new here, please start with part 1, move on to part 2 and then (hopefully) return to this post.

The next stop is Crakow in Poland, home of inFakt.pl. inFakt.pl was founded in 2008 by two extremely sharp students of the Cracow University of Science and Technology who wanted to build a simple, easy-to-use, web-based invoicing and billing application for small businesses in Poland. I invested in the company together with Team Europe Ventures early last year.

2010 saw the company dramatically expand its product offering to become a complete accounting solution for SMBs in Poland and grow the team from just five people at the beginning of the year to 14 today. To date, more than 80,000 companies have signed up for the software, which is marketed using a freemium model, making us the largest provider of our kind in the Polish market. Dziękuję bardzo, Wiktor and Sebastian, and congrats on a very successful year!

Another investment that I made in 2010 is Propertybase. Propertybase, based in Munich, offers a simple-to-use yet powerful software solution (do you see a pattern here?) for people in the real estate industry. It offers real estate developers, agents and brokers a complete CRM solution which allows them to capture leads, create sale and lease offers and agreements, manage listings, track payments and more. Since the software is entirely web-based, users can enjoy all the SaaS advantages that make the movement from on-premise to on-demand so irresistible: Never worry about updates, backups and security, access to your data from anywhere, easy integration with other Cloud-based offerings.

Apparently the real estate industry worldwide has been waiting longingly for a solution like this: In 2010, Propertybase won customers from more than ten countries and four continents and grew its customer base by more than threefold. And our customers really love us – so far our churn has, amazingly, been zero. Thank you, Mike and Max, supa g'machd!

Sunday, December 26, 2010

Portfolio Update Part 2

Continuing my little 2010 portfolio review (here's part 1), the next stop after San Francisco (Zendesk), Vancouver (Clio) and Berlin (Momox) is Edinburgh, home of FreeAgent Central. By launching a flurry of innovative new features such as multi-currency support or project profitability analysis, in 2010 the FreeAgent team has shown again who's setting the bar for online accounting. An incredibly powerful yet simple-to-use application is what 1000s of users love us for (as well as the press), and is the reason why we've won a Software Satisfaction Award for the second year. And there's more to come. 2010 has been a big year for the company in other ways as well: In March we announced that we've taken a minority investment from and entered into a strategic partnership with IRIS, the leading supplier of software for accountancy practices in the UK with over 14,000 practice customers (50% market share!). Kudos and a huge thank you go to Ed, Roan, Olly and everyone else at FreeAgent Central.

The next portfolio company takes me to Tokyo. Konnichi wa, myGengo. myGengo is a pretty recent investment of mine which I've done about half a year ago together with Dave McClure and other angel investors. myGengo is a crowdsourcing marketplace for human translations – think Amazon Mechanical Turk for translations. myGengo connects people who need translations with qualified translators in a way that's much more efficient than it used to be and thus allows it to offer high-quality translations done by certified translators at affordable prices. Thanks to this very clever idea, extremely strong execution and lots of innovations (like an iPhone translation service and a very smart API), as well as a rapidly growing list of language pairs, my Gengo has more than doubled translation volume and revenues in every quarter this year. Even so, the young startup is of course just scratching the surface of the huge, multi-billion dollar translation industry, which makes me extremely excited about the opportunity ahead. Thank you very much and doumo arigatou gozaimasu, Rob and Matt.

Saturday, December 25, 2010

Portfolio update (part 1)

As 2010 is drawing to a close I’d like to take a moment to give you a quick update on my angel investment activities and more importantly, thank the incredibly talented and hard-working people who have made it such an amazing year.

Since becoming a full-time angel investor in 2008 I’ve made 14 seed investments, with 4-5 additional ones being on the way. Except for two of my first investments that didn’t work out – rookie mistakes, fortunately pretty small ones – I’m absolutely blown away by the success of each and every company in my portfolio.

Some highlights:

Zendesk has had a phenomenal year. In May we announced that we’ve reached 5,000 paying customers. We didn’t publish an updated number since then but I think it’s no secret that the number of Zendesk lovers worldwide has continued to explode throughout the year. With a world-class management team and Board, one of the best products and brands in B2B software and a recent $19M cash infusion Zendesk is ideally poised to bring Cloud-based zen and good karma to even more people in 2011. Mange tak to Mikkel, Morten, Alex, Michael and the whole crew.

Speaking of the Cloud, 2010 may mark a tipping point with respect to the adoption of Cloud-based services in the legal technology field: In 2010 my portfolio company Clio, which provides a web-based practice management solution for solo lawyers and small law firms, has grown its customer base by more than 400%. The company also continues to launch new features and initiatives pretty much on a weekly basis, boasts (by far) the highest trial-to-subscription conversion rate that I’ve ever seen and has a ton of great new stuff in the pipeline. Thanks and merci to you, Jack and Rian, and your growing team of hand-picked rock-star developers and industry experts.

The development of Momox, which has bought more than 8.4 million used books, CDs, DVDs and games from private sellers since 2006, has been equally impressive. We’ve grown revenue by more than 2.5x , recruited two stellar executives to head logistics and marketing, moved to a new 85,000 square foot warehouse, relaunched our online shop, raised a couple of million Euros from Acton Capital Partners and scaled up the whole organization to make sure that we can handle our continued growth. Huge kudos to Christian Wegner and his 150+ people in Berlin for this gigantic and successful effort – jut jemacht!

More in part 2.

Monday, January 04, 2010

Keeping your "friends" list up-to-date

If you're reading this, chances are that you use at least three of four different social networking sites (or social bookmarking tools, microblogging services or other community sites) that let you “friend” or “follow” other people. I, for example, use Facebook, Twitter, LinkedIn and XING.

LinkedIn and XING I’ve been using for years and I find both sites to be invaluable tools for finding, connecting and staying in touch with people, as well as for checking references. Over the years both LinkedIn and XING have allowed me to get in touch with numerous people who otherwise would have been hard to contact. I think both sites are particularly valuable for younger people who do not yet have a large professional network, e.g. first-time entrepreneurs looking for angel investors, employees or business partners. It took me a little longer to adopt Twitter but meanwhile it has become one of my primary sources for news (and I became a reasonably active Twitterer). Facebook I don’t use very actively but it allows me to “follow” (almost) everyone who doesn’t use Twitter.

The challenge that comes with using multiple social networking sites is, of course, that you want to stay on top of all sites without wasting too much time. Meanwhile there are plenty of solutions to aggregate the news feeds of various social networks at one location. You can even do that with Pageflakes, despite the fact that the site is somewhat outdated by now (just look for the Facebook, Twitter, LinkedIn and XING Flakes in the Flake Gallery and add them to your page). However, to date I haven’t seen a single tool that automatically and easily keeps your friends list in synch across all sites.

What I’d like to be able to do is this: Whenever I make a new contact I’d like to check if the person is on Facebook/Twitter/LinkedIn/XING and connect with him or her. The tool could be integrated into Outlook, Apple Mail, Gmail and other desktop or web email applications. Right-clicking on any email address could bring up an “Add to my networks” option in addition to "Add to my address book".

Until someone develops a tool like this, here’s a workaround:
  1. Add all people who you’ve sent an email to to your address book.
    (Apple Mail lets you do that automatically if you choose “Previous recipients” in “Windows”. I don’t know if there’s a feature like this in Outlook, but there are some third-party tools that will do that for you. Gmail, as far as I know, automatically builds your address book based on the emails that you send and receive, right?).
  2. Export your address book to a file (e.g. .vcf).
  3. Upload your contact file to Facebook/LinkedIn/XING and choose the contacts that you want to connect with (make sure that you use the “See who’s already there” option as opposed to the “Invite” option to avoid spamming your whole address book with invitations!). Twitter unfortunately doesn’t let you upload contact files but you can upload your contact file to Gmail and have Twitter import your Gmail contacts (did I say it’s a workaround?).
  4. Repeat 1-3 every couple of weeks or months.

It’s not elegant, but it works, and at least it’s less effort than maintaining your contact lists manually. If you know a better solution, please leave a comment!

Thursday, September 24, 2009

Escaping spreadsheet hell

Have you ever seen someone get excited about accounting software? Yes, I mean the kind of software for which you used to need a diploma in number-crunching and a PhD in bean-counting in order to be able to use it.

Enter PC Pro’s review of FreeAgent, the web-based accounting tool that I’ve joined as an investor and advisor earlier this year.

This is not one of those product reviews where someone spends an hour testing five different applications and writes a roundup afterwards. No, this guy has spent a year working with FreeAgent, so his opinion is extremely well-founded. The article gives a good overview of what FreeAgent is all about and why it’s so much better than Sage (which is or at least used to be the de-facto standard accounting software in the UK).

I urge you to read the full article, but if you want the conclusion only, here you go:

FreeAgent ranks in my top couple of web applications of any sort. As an extremely busy person, I confess to almost enjoying doing the accounts now!

It’s rare that I feel able to recommend a product unreservedly: this is one of those occasions. FreeAgent starts at £15 per month for a sole trader and, given the range of features and ease of use, could easily become your most important application for administering your business.

Congrats to Ed, Olly and Roan at FreeAgent Central for building such an outstanding product – and for managing to turn an extremely unsexy product category into something which people get excited about!

Monday, August 17, 2009

Paul Graham on Enterprise Software

A link in today's TechCrunch posting about Y Combinator's "Request for Startups" idea brought me to an earlier "Startups ideas we'd like to fund" list, published by Paul Graham about a year ago. It's a terrific list of ideas, and I applaud Paul for sharing them (execution is everything!). If you're toying with the idea of founding an Internet startup and you're not sure what kind of business you're going to start, I highly recommend going through the list. I'm sure you'll find lots of inspiration.

One thing that I'd like to quote from the original article is the paragraph on Enterprise Software:

Enterprise software companies sell bad software for huge amounts of money. They get away with it for a variety of reasons that link together to form a sort of protective wall. But the software world is changing. I suspect that if you study different parts of the enterprise software business (not just what the software does, but more importantly, how it's sold) you'll find parts that could be picked off by startups.

One way to start is to make things for smaller companies, because they can't afford the overpriced stuff made for big ones. They're also easier to sell to.

Brilliant.

Wednesday, July 01, 2009

The Europas - Cast your votes!

"The Europas", the tech award that was brought into being by TechCrunch UK's Mike Butcher (profile, Twitter account), is getting a lot of attention in the tech world at the moment. The award, which "honors the best tech companies and startups across the web and mobile scene from across Europe, the Middle East and Africa", will be presented in a big ceremony on July 9 in London.

I'm delighted that two of "my" companies (i.e. startups where I'm an investor and active advisor) have been nominated in the Best Enterprise / B2B Startup category – congrats to Mikkel and the team at Zendesk and Ed and his team at FreeAgent Central.

If you're a happy Zendesk or FreeAgent Central customer or partner (or if you just want to do me a favour :-) ), please go ahead and vote for us. There's no registration required so it's really quick and easy to cast your vote. The voting deadline closes today at 23:59 GMT so you'll have to hurry up a little.

By the way, I am also nominated in the "Best Investor Personality" category. Most of the other investors on that list have a lot more experience than I and have helped many more startups succeed than I, but if you still want to vote for me, here's the link. :-)

Tuesday, March 24, 2009

Guy Kawasaki's fun email signature

I just got an email from the famous (and with respect to his Twitter activity, some would say infamous) Guy Kawasaki. His email signature is really hilarious, which is why I want to share it with you:
Sent from a MacBook not an iPhone.
--------------------------------------

Guy Kawasaki
Nononina, Inc.
360 xxxx Street, Suite 100
Palo Alto, CA 94301
http://alltop.com/

xxxx@xxxx.com (best way to get in touch)
650-838-xxxx office (you'll never get me here)
650-387-xxxx cell (Spinvox will convert voicemail to email so I don’t have
to listen to people ramble)
650-853-xxxx fax (what's a fax?)

http://twitter.com/guykawasaki (if you have no life)
http://blog.guykawasaki.com/ (if you want to see why I have no life)
http://holykaw.com/ (if you want to see how I have fun in my life)
(Replaced some details with Xs to protect his privacy in the unlikely case that he has any.)

Wednesday, March 04, 2009

Zendesk - Help Desk 2.0

Following my long-due update on Pageflakes here’s an update on what I’ve been doing since I’ve left Pageflakes. After spending some time with my family at a beautiful place in the sun, I started to look for new opportunities (to be perfectly honest I of course couldn’t resist researching new ideas while we were still on Barbados. Caribbean beaches and a DSL connection, what more can you ask for?). For various reasons I wasn’t yet ready to start my own thing again so I started to look for existing early-stage companies where I could come in as an angel investor and advisor. To some degree I “went to the dark side” (of funding) as it’s sometimes referred to but I’m really trying to be worthy of the term “angel” investor by really trying to help my companies in many different ways.

The first company I’ve made an investment in is Copenhagen-based Zendesk, founded in 2007 by a rock-star team around CEO Mikkel Asger Svane. This is no new news since it was announced last June and covered by Om Malik and others but I still wanted to blog about it here. If you don’t know Zendesk yet, the company offers a beautifully simple yet powerful on-demand help desk solution. You can buy and operate the system online and never have to worry about downtime, upgrades, security, backup or training. Setup is extremely easy and you can be up and running in hours.

Any business that serves more than a handful of customers needs a help desk solution in order to handle customer questions and support requests. Existing solutions are expensive, painfully difficult to set up and hard to use. Zendesk combines a professional-grade feature set with a beautifully simple Ajax-based user interface that resembles everyday web applications. If you want to have more productive and happier customer agents and want to save money along the way, check it out!

Monday, February 02, 2009

An update on Pageflakes

It’s again been a very long time that I wrote something here, and an even longer time that I wrote about Pageflakes or about what I’ve been doing since I left the company about a year ago. I did become a reasonably active Twitterer in the meantime though – the 140 character format is probably better suited for my literal talent! Anyway, I thought it’s time for a quick update.

One of my last blog posts about Pageflakes was about my attempt to convince Mike Arrington and Pete Cashmore that Pageflakes was the Next Big Thing, my goal for 2006 as I put it (half joke, half serious). While both of them were very skeptical about the whole thing in the beginning, Pete wrote a very favorable posting about us in October 2006. Convincing Mike was more difficult but he got more and more positive over time as well, covering our 2.0 relaunch as well as release “Flurry” and “Blizzard” (thanks, Dan, for introducing a nicer release terminology!).

With each of our major releases we made it easier to create a personalized page and to get all the best the Web has to offer on one page. I think we also raised the bar for the whole category of personalized homepages with each release. This is the result of a huge team effort, which the whole Pageflakes team can be very proud of, especially if you consider that our most important competitors were iGoogle, MyYahoo and (vastly better-funded) Netvibes.

Nevertheless, although we did get more and more users who loved Pageflakes and used it as their very own entry point to the Internet and did get considerable mindshare, especially in the Web 2.0 community, we (and the whole market, for that matter) never grew as fast as we hoped. One of the reasons was that as much as we tried to make the product as easy-to-use as possible, the barrier to adoption was still a tad too high for many users. Creating your personal page just never got as easy as watching a video on YouTube. YouTube offers users instant gratification. Your own Pageflakes page may provide you more value in the long term, but getting there also takes a little longer. Likewise, although we had considerable success in redefining the product category of personalized startpages into a more "social" one, Pageflakes never got (and never could get) as social as, say, MySpace. Although hundreds of thousands of users created an extremely diverse variety of Pagecasts and shared them with their friends or with the general public, the majority of our users just enjoyed their pages privately. That didn’t come as a surprise, of course – Pageflakes falls under the 90/9/1 rule whereas you have to connect with friends on social networking sites.

We did hope that the product would get more viral and social though, and in order to become the next Yahoo! (our slightly ambitious stated goal when we started at the end of 2005) we would have needed higher organic growth rates (ironically, if Yahoo! continues to fare as badly as it did in the last months, we can still become the next Yahoo! ;-) ). So when 2007 turned to a close, we had an award-winning product with a loyal user base that was growing but wasn’t big enough and wasn’t growing fast enough in order to monetize the service effectively in the near term. Around the same time, the appetite of VCs to fund companies like ours started to decrease, resulting in worsened terms for startups. In that situation, we thought our best choice was to partner with a large player that has a huge amount of users.

Many know the rest of the story: In April 2008 we got acquired by LiveUniverse, the new media company of MySpace founder Brad Greenspan. Unfortunately our initial enthusiasm about the deal started to fade away quickly since Pageflakes quickly started to suck. First just a little (no more new features), then more and more (bad customer service, sudden introduction of obtrusive ads on users’ pages without any communication, downtimes), and the last dark climax was an outage of about four days without any communication from LiveUniverse to its users, causing a ton of understandable complaints of Pageflakes users on Twitter. It took me a long time to admit this publicly and I really don’t like to badmouth the company that bought Pageflakes, but it’s time for me to say sorry to all Pageflakes users. If a super loyal Pageflakes user like Phil Bradley has to write a blog post like this, you know that you have crossed a line. Phil has been using Pageflakes for years and wouldn’t leave the service light-mindedly. But enough is enough – his post says it all.

As of right now, Pageflakes is up again but because of the almost complete lack of communication on behalf of LiveUniverse I don’t know how long it’ll stay up and running. The company told CNet's Webware on Friday that the downtime was due to a data center migration but I don’t know if it’s true. Other reports indicate that they are in trouble. I’ll continue to use Pageflakes for now and will keep my fingers crossed that LiveUniverse will change course. If you do have to shut down the service, dear Brad Greenspan, please give the users at least two weeks’ notice to save their data and move to another service. There are many legitimate reasons why a company can fail or why a service needs to be shut down. But you really have to make sure that users get a chance to save their valuable data. Failure to do this is not only puts Pageflakes users in trouble, it also undermines users' trust in the cloud in general. Thank you.

Wednesday, May 07, 2008

The New Digital Divide

Shafqat over at Newscred, a digital newspaper which is currently in private alpha, wrote a good post titled "The New Digital Divide - Building Web Services for the Mainstream". His point is that the chasm between early adopters on the one hand and mainstream users on the other hand is getting larger:
The mainstream don’t even use or understand RSS, but us techies have moved on to Twitter and FriendFeed.

Very true. While it's great to see all those new Web 2.0 ideas, innovations and technologies coming up every day, we (the Web 2.0 community) also have to avoid creating lots of products which no one else except ourselves is going to use any time soon.

If your startup's plan is to acquire millions of customers over the next few years (which is likely if you want to make money by selling ads), do a reality check and explain your idea to some "real" people among your friends and family.

Also read Josh Kopelman's great article about the same topic.

Tuesday, April 22, 2008

A nice way for your beta site to say "Feedback please"

Have a look at the screenshots below:







What do these otherwise completely unrelated Web 2.0 sites have in common? Instead of the good old "Send Feedback" link in the page footer, all three of them prominently feature a large, red, eye-catchy "beta feedback" badge.

If you click on the badge, a window that contains the feedback submission form pops up; usually instantly, without a full page reload, so you can type in your feedback right away. Often the background of the page is greyed out, producing a lightbox effect which puts the feedback form into full focus.

I think this is a smart advancement of the notorious Web 2.0 beta badge. If you’re featuring the "Send feedback" link so prominently, firstly and obviously more people will notice it and provide you with valuable comments, bug reports and suggestions. Secondly, you show your audience that you really care about what your users think. Consider using this emerging UI pattern - at least as long as you’re in public beta (which you might be forever).

Sunday, February 03, 2008

Microhoo: I (almost, kinda, sort of) told you so ten years ago

When I was reading the news about the proposed Microsoft/Yahoo! deal, for some reason it recurred to me that I was speculating about Microsoft buying AOL in a Usenet forum back in 1997. Yahoo! isn't AOL and the idea was pretty far-fetched at that time, but interestingly enough Microsoft's rationale for buying Yahoo! at the beginning of 2008 looks similar to the rationale for buying AOL more than ten years ago.

Friday, December 08, 2006

Pagebull - your visual Internet search engine

A few days ago, Pagebull went from stealth mode into public beta. Pagebull is the latest brainchild of my good friend and long-term business partner Christopher Münchhoff. It's a new search engine that provides a radically new user interface: Instead of a text-based list of the sites that match your search query, it shows you a grid of large screenshots of those sites.

The idea behind Pagebull's approach is that when you go to a site, you'll often know after a second if the site has what your looking for or not - and an inappropriate amount of time is wasted going back and forth between Google and the "target" sites. Pagebull now lets you glance over nine or more screenshots at a time, saving you the effort of clicking from one target site to the next.

What's interesting is that Pagebull benefits from two important industry trends: More bandwidth and larger screens. Using Pageflakes on a 30" screen and a super-fast cable connection must be fun!

It would be interesting to conduct a study to find out how much time Pagebull saves an average Internet user who spends, say, an hour per week on Google. Then just extrapolate that to all American office workers, and the US economy can probably save a few billion worth of productivity per year. ;-)

Seriously: Pagebull will not drive Google out of business any time soon, but it's an extremely impressive, innovate approach to improve the search engine user experience on the Web.

Try it!

Friday, November 03, 2006

Pageflakes 2.0

About two weeks ago we launched a new version of Pageflakes and it's time to finally announce it here, too! If you go to the site, you will notice the big facelift that the site received. The fresh new look might be the most visible change, but it's by far not the only one. The long list of improvements and new features of the new version includes:

Check out the new site!