Tag Archives: startup

Entrepreneurship: The easy part…

New Yorker Cartoon

Courtesy of Robert Weber and the New Yorker

Free Business Ideas: Karma Calculator (Unlocking value by measuring flows of assistance)

Tao Te Ching
Image via Wikipedia

Tabulate and publish the “props” and “thanks” between people.

We keep track of the money we owe each other, but why not the favors and nice things we have done?  We all know which of our friends is always willing to lend a hand, let’s celebrate that person and give them the recognition they deserve.  Similar to how I receive weekly “Network updates” on Linked-in, it would be cool to get weekly reports on how “Brett thanks Bryce for editing his paper” and “Brian thanks Janos for the ride to TN” or “Michelle thanks Jordan, Aranda, and Kar Han” for coming to her show.”   Create a leaderboard so that everyone can see who is helping out, thus creating incentives for people to help each other more often.  Not only would this system give the most helpful people the recognition they deserve, it would eliminate the shadows in which the less helpful among us hide.

Clearly, people’s fear of being valued and unable to hide their unwillingness to pitch in is the largest obstacle to the adoption of such a system, so I would focus on the positives.  Unlike the Time Banking Idea I articulated on Monday, a Karma Calculator would not be tit for tat but rather a homage to those that help a brother out.   It’s kind of like micro Linked-in recs.

What do you guys think?  Would you be more or less likely to help someone that you know has gone out of their way to help others?  Do you think that helpful people would be overwhelmed with requests?

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Online Community Building: Make affiliations more valuable by making people earn them

LOUISVILLE, KY - MAY 26:  Boy Scouts salute th...
Image by Getty Images via Daylife

What happens if you make people do something to earn their affiliation to an online community?  Clearly there is a trade off of quantity for quality but I wonder if you make up in engagement what you lose in volume. Does anyone have good examples of  where this has been done?

Most online (and offline) groups and affiliations only distinguish people by how much they give, and make no effort at accounting for what people actually do. Unfortunately, all the flag waving and fund raising in the world is useless without the people that actually implement the good works.

Take Causes.org* for example. While Causes.org is provides better accountability than most online affiliations because it measures what users donate and how many other people they recruit, they have no means of recognizing people that actually implement the good works.

It always annoys me when I go to a benefit at, say, the New York Philharmonic, and there is a gigantic list of people that have donated money, but no mention of the people that have donated their time, connections, or reputation to make things happen. Similarly, it has always annoyed me that you can just plaster your Facebook or linked-in profile with hundreds of badges of organizations and associations that you have never once lifted a finger for. Sure spreading the word has value, but I think that associations and badges would become more meaningful if one actually had to do something to acquire them.

Look at the Boy Scouts. Do we give away “fire starter” badges to kids just because they want to fill the empty space on their belt? What about black belts in karate? There is a big difference between a dojo where people earn their stripes and one where people pay for them.

Especially now that most work is digitally distributable, there is no reason that one couldn’t harness the social web to actually get actual work done. I might not have $10 at the moment, but I’d be happy to donate 10 minutes of data entry for a FB badge of a cause I believe in.

I am interested in the community building effect of making people earn their affiliation. Does anyone have good examples of  where this has been done?

*Causes.org is a non-profit Facebook application that enables users to identify and support the “cause” (charity) of their choice. Causes users can do three main things: 1) “join” a cause (place a specific charity’s badge on their profile), 2) “donate” to a cause (directly send money to the specified charity through the app), or 3) “raise” for a cause (recruit their friend’s to join and donate). Causes’ 15mm active monthly users make it the 4th most popular Facebook application and thus an incredible hit.

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Free Business Ideas: Time-based Barter Economy Targeted at Entrepreneurs (Timebanking Revamp)

Clock in Kings Cross railway station
Image via Wikipedia

The other day I stumbled across a social experiment called “time banking,” at timebanks.org. Basically, Time Banking is a community improvement movement that revolves around the principle that every person’s time is worth the same (Yes,  quasi-socialist).  Each community creates a “Time Bank” where community members can make “deposits” by lending their time to others and “withdraws”  by calling upon other community members for help.  It facilitates a barter economy with currency denominated in hourly increments of service to your fellow man.

“For every hour you spend doing something for someone in your community, you earn one Time Dollar. Then you have a Time Dollar to spend on having someone do something for you.”

An example.  A lawyer helps a little old lady clean her yard  for an hour.  He ears a credit.  Then he can turn around and get an hour of guitar lessons from another guy around the corner.  The guitar player could then ask for cooking lessons, perhaps but not necessarily from the little old  lady.

During boom times, when everyone has more business than they can handle (ie. plenty of money but no time), this idea seems silly.  But in the midst of steep recession, when everyone has no money but plenty of free time, the concept might be once again applicable.  A year ago, it might have seemed crazy for a lawyer to swap services hour for hour with a plumber whose market rate is 1/5 his own.   But if the lawyer has nothing else to be doing and no way of generating business at his billable rate, is it so crazy for him to save the $50 needed to fix his sink by spending an hour helping his plumber resolve a legal dispute?

I think the concept of bartering services is particularly applicable to startups, a group that is always short on cash.  In fact, a good bootstrapping entrepreneur will  always barter services, whenever it is pragmatic, to preserve cash.   This happens all the time, albeit informally.

Time Banking started almost 30 years ago and has spread to “22 countries in six continents” according to the official website.  A  quick google search for “time bank your zip code” will almost certainly produce a small community website.  Unfortunately, the success of Time Banking appears to have been limited by the onerous setup costs.  If your community doesn’t  have an existing infrastructure, you are urged to set one up by buying a “Time Banking Start-up Kit for just $49! With the kit, you get a six month membership, access to the coordinator forum, and a 4.5 minute DVD from the founder of time banking!!!”

WTF?!? 

$49 to join a social network and get a DVD of some old dude talking about something he did three decades ago?

It sounds like a con scheme but no, this is actually a rather sizable nonprofit organization operating on a pre-internet infrastructure.

Check it out for yourselves.  Is there anyone out there that would be interested in writing a Facebook application to bring this concept into the 20th century*?  Seems like you could add a lot of value to startups that have complementary skills.

*Yes, they have a page, but I see no reason why the whole infrastructure shouldn’t  be put up on the web.

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“What Should I Work On Today?” A very entrepreneurial problem…

This piece is an excerpt from my Fulbright research with Prof. Thanos Papadimitriou of SDA Bocconi.  You can find out more about our research on our blog “chefsnotbakers.”

What if your company lacked a consistent process to decide which opportunities to follow and which fires to fight? What if you had no tangible feedback on customer satisfaction, design productivity, or market share? Even worse, what if you had no customers, products, or market share? No, it’s not a nightmare; it’s a typical early stage company.

“What should I work on today?” is a question that entrepreneurs ask themselves every day.

Rightfully so. The success or failure of rapidly growing but resource constrained businesses depends directly upon their founders’ ability to juggle a variety of diverse tasks. Paradoxically, because startups generally operate on the thinnest of margins, success or failure hinges on entrepreneurs’ ability to focus all of their effort on exactly the right issue, at the exactly right time. Only by catching fires early and extinguishing them as quickly as possible, can entrepreneurs carve out time to create real value.

Unfortunately for entrepreneurs, it is human nature to focus on the facets of the business with which we are most comfortable, even to our detriment. History is littered with failed startups that couldn’t see the forest for the trees. Salesmen bleed their company of resources by chasing inappropriate customers. Financiers produce spreadsheets that bear no resemblance to reality. Technical founders write code while the bank runs dry. Products are created with no customers, business plans go unrealized, and popular but profitless online services linger as the remnants of past founders’ myopia. To paraphrase novelist Henry M. Tomlinson, founders see things not as they are, but as they are themselves.

Insidious internal biases afflict techies, MBAs, first timers, and veterans alike. Take the failed startup Monitor110. Lead by brilliant technicians and Wall Street veterans, the startup’s ambitious plan to index of entire the dynamic web’s financial information made it one of the most anticipated new firms of its time. In mid-2005, despite willing customers and a working beta product, the firm opted not to release V1.0, choosing instead to explore newer and more powerful search technologies. The decision to pass up early market feedback proved fatal. As time passed, both internal and external expectations for the product soared. In response, the firm retreated inside of itself. Although the team was working harder than ever, fear of disappointing an eager market began to push the firm farther away from its customers. Without regular feedback, the firm’s product-market fit began to erode. By the time Monitor110 finally released v1.0 almost two years and three rounds of funding later, the gap between product and market had grown insurmountable. They had built a product no one wanted and there was no money left to build something new. Despite having all of the prerequisites for success—a rock star team, an innovative product, a massive market, and plenty funding—Monitor110 failed. Success is not only sourcing and building the critical pieces, but aligning them together in a sustainable way.

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