Startup ideas in plain sight

It is so amazing to me that startup ideas exist right under our noses, yet we ignore most of them. A good idea typically involves the following format.

is difficult/time consuming/expensive.

We think that by applying , we can enable to do

But the idea is just one percent of it. Execution is the other 99%.

Some recent ideas that seem so obvious in hindsight

Ovuline - app that helps couples get pregnant. Based on tracking signs such as temperature, weight and based on technology  developed by Harvard scientists.

Change Collective - tools for change based on behavioral change principles. Books provide inspiration, but Change Collective provides the courses and reminders that enable change in bite sized chunks

Drizly - alcohol delivered. That really doesn't need any more explanation.

To increase my old idea generation rate, I maintain a separate notebook of startup ideas, and just common problems I see around me. I don't intent to work on them - I am already working on something new. The key thing is building a habit of coming up with new ideas.

So look around you - there are several ideas just waiting to be discovered.

Relentless resourcefulness: the What, Why and How

 Reposted from my new Blog, The Business Co-Founder

The most important quality of an Entrepreneur is relentless resourcefulness; even Paul Graham agrees. In this post, I will cover
1. What is relentless resourcefulness?
2. Why is it important?
3. How do you build it?
So let’s start.

What is relentless resourcefulness?
The dictionary defines resourceful as ‘Able to act effectively or imaginatively, especially in difficult situations.’ Relentless resourcefulness is simply resourcefulness + perseverance - or applying resourcefulness continuously, without giving up.

Why is it important for Entrepreneurs?
In startups, you will continuously come across situations that pose novel, difficult problems, for which there is no easy, obvious solution, and which force most people to give up. Only if you are relentlessly resourceful will you overcome these challenges, and not give up. This might take various forms e.g., your funding round did not come through - how do you become creative and bootstrap for another three months? OR your customer development interviews showed that your target market has no need for your product - how and where do you pivot?

How do you build it?
This Life Hacker article gave me the following equation, that makes complete sense
Resourcefulness = Necessity + Creativity + Persistence
So the only way to build resourcefulness is to build each of the constituent qualities.

Necessity
Though not a quality, necessity signifies that you are most resourceful when you need to. This is why people often tell Entrepreneurs to quit their job; when you have no fallback, you become more resourceful.

Creativity
You might not consider yourself very creative, but there is a big difference in the different kinds of creativity. As a blog post I wrote a while ago, Conceptual Creativity is what you need to be successful in Business. There are several interesting books you can read on this topic (list below). But here are my favorite tactics:

• Question everything - try to look at the underlying assumptions and see what happens if you reverse them
• Look for outliers and anomalies
• When generating ideas, start with one idea - any idea, no matter how stupid. That gets your mind going
• Think of ideas alone before and group sessions - group sessions encourage group think
• Have fun and believe that you are creative

Persistence
While there are several ways to be persistent (and tons of articles and Quora Answers on persistence/perseverance), I believe in one way more than any other way: Invest in the process, not the Outcome. No matter how much we believe in our qualities, our ability to change the world, the truth of the matter is that several circumstances are outside our control. ‘Luck’ plays a part - a huge part - in the success or failure of any endeavor. Market dynamics change, unforeseen things happen. The idea is the be emotionally tied to the process, and not the outcome. That way, you will not give up when you are faced with obstacles, because you did the best you could, and be truly, persistently, persistence


Further Reading: Creativity
The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators
Disciplined Dreaming: A Proven System to Drive Breakthrough Creativity
The Riddle: Where Ideas Come From and How to Have Better Ones
Further Reading: Persistence
Are You Ready to Succeed? Unconventional Strategies to Achieving Personal Mastery in Business and Life

The rise of the subscription model

It seems like there there is a new E-Commerce website with a subscription model on Tech Crunch every week! Just one week ago, Lost Crates expanded their subscription model to includes verticals other than what they had started with first: boutique stationery goods. There is a pretty good list of subscription services here. I started wondering: what is behind this new trend?

Let's first consider what job customers hire these websites to do? In one word - curation. Consider the example of Bespoke Post, launched by my Kellogg classmates, Rishi and Steve.

Bespoke Post sends you hand-picked goods, which enable you to 'Turn into a gentleman. One box at a time.'  And they send you a new box of 'Awesome'. Their marketing message is simple and brilliant. Their persona seems to be - wait for it - 'Barney Stinson.' For people who do not watch the show 'How I met your mother,' Barney is his early thirties and almost always wears a suit. He picks up women - all the time. And always has an opinion. And uses the word Awesome and Legendary a lot! Hence Bespoke Post's marketing message reads (at least to me) if you are a classy gentleman who like the fine things in life, subscribe to our service, and we will send you products that help you maintain your classiness. And it's all curated by us, so there is no effort on your part. And by the way, their products are super awesome!

Next let's consider, what is behind the rise of so many subscription model E-Commerce businesses?

1. Subscription models have been around forever; these businesses are online versions of traditional subscription businesses.Wine of the month club comes to mind.

2. Such businesses can start producing revenue quicker than let's say a marketplace. What do you need to get started? A cool concept, a good website and some amount of inventory and a clear value proposition. Layer on the marketing on top.

3. There is a good amount of predictability. Only order a little more than you think you need for that month - since you are seeing numbers month to month, you can predict the demand for next month to a reasonable degree. If you under order - back order the goods, please the order with the supplier, and have them shipped out a little later.

4. Most of them are buying from small suppliers, so they have enough negotiating power to get good margins, and also shift some of the risk over to the suppliers

5. The cost of customer acquisition is lower in this new era of social media marketing. And then there is affiliate marketing - just offer your customers $10 off for very friend that signs up, and you have another channel going

6.  As the number of such businesses will show, there are enough number of niches to be filled

7. On the customer side, another value proposition is surprise. As an example, Birchbox sends 4-5 samples/month for $10. What the samples would be? That's a surprise that's eagerly awaited by customers

8. The perceived price from a customer's perspective is lower; Psychologically speaking, $19.95/month seems much lower than $240/year.

9. I think the biggest factor is that these businesses give the founders a chance to share something they are passionate about. For example another friend Gautam, from the same Startup Leadership Program batch as I, launched Naturebox, which sends healthy Snacks daily. He passionate about healthy food, and the startup enables him to share this with his customers.Read this excerpt from his blog:

"As a co-founder of NatureBox, I’m especially pleased to introduce you to our company and thank you for your visit. The NatureBox mission of helping you eat healthier without changing your daily routine, has great personal meaning to me. I grew up overweight – weighing more than 200 pounds at the age of 12 – and struggled with obesity for most of my life. As a child, I would come home from school and spend hours eating junk food. My weight struggles were preventable if I had healthier options and better eating habits. Through hard work and dedication, I lost weight by focusing on healthy foods. Now I am dedicating my life to helping others discover a healthier you."


But as the number of these business rise, what will enable each one to be successful?

1. Scale - is the market big enough? Probably boutique stationary goods is not!

2. A clear marketing message - as in what do you provide, and who do you provide it for? Can the customer easily recognize that the service is ideal for them?

2. Trust - do your customers trust that you will send high quality items? Startups often prove this by showcasing examples of things they have sent before

4. Additional revenue sources - even with a large number of customers, the business model might not support a large company. Additional revenue sources come in handy here. A prime example is Birchbox's marketplace - if you like the samples they send, you can purchase a full size version of the product right from their website.

So go on, find the subscription service right for you now!

Alice.com - great concept, terrible design!

I recently came across a new e-commerce site called Alice.com. This is how Alice.com describes itself "Alice.com will be an open, online retail platform for consumer packaged goods, focused primarily on linking manufacturers of essential household stuff like tooth brushes, toilet paper, trash bags etc. to end consumers directly." - Crunchbase.

I was intrigued - why Alice.com? Why not Amazon.com - doesn't has the same variety of goods? What do you gain Alice.com, rather than drugstore.com or amazon.com? Then I saw Alice.com's crunchbase page.

"Consumers currently lack a convenient way to shop for household essentials on the web, while manufacturers of consumer packaged goods are in the market for a fresh alternative to the large bricks-and-mortar retailing services. The Alice.com model will be unique both in terms of how goods are ordered/distributed and how consumer packaged goods companies can target, incentivize and personalize offers to consumers"

Once I explored the website I did begin to understand the merits. See for example the page for the Cat litter deodorizer. It clearly lays out how long the product typically lasts, reviews from customers etc. Some other pages also laid out the green rank of products etc. The bottom line - the site is custom designed for household products, and so gains a significant advantage over other sites like amazon.

Thinking of Alice.com in a jobs to be done framework, the site is enabling users to shop for household products online rather than go to the store. Quoting from a HBS working knowledge paper, there are a few dimensions to this framework:

"With few exceptions, every job people need or want to do has a social, a functional, and an emotional dimension. If marketers understand each of these dimensions, then they can design a product that's precisely targeted to the job. In other words, the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy."

In terms of functional dimension, the site does well in terms of how it enables viewing of various aspects of household products important to the user e.g., how long they last, how green they are etc. There is also a product rank section that lets you see how other products in the same category are handled. This is something that amazon is likely going to find hard to do, given that they have a much larger variety of products, and products can be listed by merchants in the marketplace. So far, so good.

The social element is well handled - in terms of reviews appearing instantly on the tight, letting you see what the other users think of the product. Another aspect of both social and emotional element is the budget; the question is there on a lot of people's minds - am I paying more than others for the same stuff? The site shows a tab called My Budget which compares your expenses to the average household.

There are two things that the site does badly. One is design. See the following screen shots: in the first one I hover over one of the category icons. As I go to select a subcategory, I move the mouse left - and the category to the left gets selected. I had seen such issues with websites designed in 2000 - it seems that they did hire a designer from that era!

The second thing that seems to be forced is social networking. There is a section called MyFriends - where you can share activity related to your favorite products in the neighborhood. The web is full of places where people highlight products that they love - but these products carry a lot more emotional value for them. Whether it is music, movies, books - sharing these highlights an aspect of the user's personality.  I completely understand reviews - but social sharing of toilet paper and detergent is unlikely to excite anyone. I might be proven wrong, but I doubt it.


It would be certainly interesting to see how Alice.com does. I haven't made my first purchase yet, but do plan to soon, and post more thoughts on the site.

Niceness as a competitive advantage

I was at a startup pitch event recently. The format was typical American Idol. The judges - typically VCs or angel investors - gave frank, honest comments which would be super useful for the Entrepreneurs. Everyone was happy.

But there was one VC who was nice. And not just nice - super nice. Even when the Entrepreneur was not up to the mark, he offered words of encouragement. And gave constructive criticism in a nice way. He seemed to realize that this work means a lot for the Entrepreneur, and must be appreciated, even if it is not ready for primetime yet.

Keep in mind that the nice VC did not hold back on criticism at all - far from it. He just expressed it in a kind, sympathetic manner.

I think this niceness is a competitive advantage in today's world; people who were watching the interaction will probably go to the nice VC first. And when an invest-able deal comes around, the Entrepreneur will likely pick him (if there are multiple choices) - because the VC will be great to work with.

10 mistakes deck from Tara Hunt of Buyosphere

The 10 Mistakes I've made...so you don't have to

View more presentations from Tara Hunt

Remember when you were a kid?

On internet marketplaces....

I have written before about two-sided markets.Harvard Business Review has a phenomenal paper on strategies for two-sided markets. I have been observing the emergence of a large number of internet business that generate value by connecting two distinct user groups, and gathering my thoughts on it. Here is how I think about these businesses.

How does the business generate value?
One needs to think about how the business generates value for both groups of users. Value is generated by one or more of the following ways:

1. Lowering costs or effort: Let's take the case of TeachStreet, a marketplace connecting students with teachers. For students, it simplifies the process of looking for a class. For teachers, it lowers marketing expenses and effort; by creating one single site that lists all teachers, TeachStreet can perform SEO much better, ensuring that its pages show up near the top of Google search results.

2. A better match: The other side to the coin is how internet marketplaces can help create a better match.

Let's take the example of eharmony. While you would not see it as a classic 'marketplace,' it is essentially matching guys to girls. No, eharmony does not support men seeking men, or women seeking women (so I heard). Anyway, back to my original point - because of a large number of men and women on the site. EHarmony is able to leverage attribute based matching and proprietary algorithms to get a supposedly better match.

Another example is EBay - you can get the exact product you are looking for, down to model, version number etc. etc.

3. A unique experience: A number of marketplace-like businesses have started provide unique experiences, not available anywhere else.

Skillshare and Sidetour are the first two that come to mind. Skillshare is 'a community marketplace to learn anything from anyone.' Which means that people who were not sharing their knowledge before, are doing so, using the platform. Sidetour, a 'Marketplace for Authentic Experiences,' provide experiences that you cannot find anywhere else. For example. 'Visit NYC's Flower Market and Create a Bouquet with a Floral Designer' by the owner of a Floral Design Boutique who has a lot of knowledge about the NYC flower market (otherwise she would be out of business).

A challenge for these marketplaces is their uniqueness - particularly, how can they scale while maintaining their uniqueness and quality. It is completely possible that as these platforms get more and more popular, more people sign up to teach. But then again, would the quality of people signing up be just as good? That remains to be seen.

Value proposition

Similar to the point above re: value generation, Marketplaces need to have a clear value proposition defined for customers. The value proposition might emphasize comprehensiveness (eBaY - the world's largest marketplace for goods, so you can find anything here), uniqueness (other than the examples above, Etsy - the marketplace for handmade goods that you cannot find elsewhere), cost (one of the main attractions of AirBnB, though so is uniqueness) or quality (TakeLessons.com for example provides customized music lessons by handpicked teachers, to ensure quality).

One value proposition might affect another; for example, comprehensiveness = more buyers and sellers = more efficient marketplace = lower cost.

Revenue model
Several interesting revenue have emerged in marketplace businesses i.e., ways in which the marketplaces themselves make money

1. Transaction fees - from the days of eBaY, this is the most popular model. Fees might be percentage of final price plus flat fees (e.g., eBaY's listing fee, fee for using more than 5 images etc.)

2. Subscription fees - typically, one side of the marketplace is charged a subscription fees, while the other is free. Normally it is the service provider which is charged

3. Other - Some companies have other revenue models.

BetterFly.com, for example, has none :). My guess is that they are aiming to build a large user base at first, and worry about monetization at a later point. This might be a great strategy; once they have regular matches on the website and people contacting teachers, they can monetize by solving various problems for their clients. One might be appointment scheduling - if a user lookup the service provider's calendar, scheduling an appointment through the web and pay up front, this might save the teacher a lot of hassle, and reduce the risk of no-shows dramatically.

NextGuru.com asks all service providers to give a free first class, and charges $20 to the student for the class.

One of the most interesting business models is from restaurant reservation site Savored. Started by SLP fellow Benjamin Kean, Savored helps restaurants solve capacity management issues; essentially, you can reserve a table at a restaurant for an off-peak time, and get 40% off food and alcohol. You get money off the meal, and the restaurant gets to fill in idle capacity and generate incremental revenue. For this, you pay $10 to make a reservation through Savored. As of now, 635 restaurants have signed up for Savored, and the website is reportedly doing very well.

Success factors

So what determines success in this business? Simply put two things:

1. Are you able to build a large user base on both sides of the marketplace?

2. Is your customer lifetime value significantly higher than your user acquisition cost?

Let's look at both factors in detail.

1. Building a large user base: The first problem in building a large user base is getting the initial users. Marketplaces face the chicken and egg problem at first. Why would parties on one side of the platform sign up, without enough users from the other side?

Startups often give one side offers such as free trial period, in which they have no upfront costs, and won't see any costs until they see some sort of indication that they are benefiting from the marketplace. This indication could take the form of people signing up for their service, or even visiting their page.

Sometimes this trial is not enough, especially if it takes some effort to sign up, create a profile etc. Startups can further boost the initial signups by making the process as simple as possible, and providing some kind of value to the user immediately upon signing up. Betterfly for instance providers teachers a set of Marketing tools that allow teachers to market themselves in other venues such as Google Places, Craigslist etc.

Sometimes the trial is necessary for both sides. For example a site connecting buyers and sellers of goods could give the buyers $5 off first purchase etc.

The second problem in increasing the user base is capitalizing on the initial set of users to make sure that your business grows virally. Word of mouth marketing plays a big role in this. In the age of Facebook and Twitter, websites must make it simple for users to spread the word about their Marketplace. For example, if someone signed up for an event through your website? Share on Facebook. The next most emerging channel might be Pinterest



2. Making sure LTV>> CAC: Let's talk about both LTV and CAC with an example. Take the case of a marketplace that matches teachers with students. Let's say the cost of acquiring a student is a dollar through a combination of SEO/SEM/Social Media and Inbound marketing. What will determine the success of the business is whether LTV is much bigger than the the initial acquisition cost. Let's also assume that the revenue model is percentage of transaction - Let's say 5% of transaction.

Suppose the student finds a teacher through the website, and signs up for the first class online. If the cost of the class is 20 dollars, revenue generated is 5% of $20 or $1. Which is equal to the acquisition cost of the user.

The key question is - what happens next? Does the student meet the teacher, and decide to do more classes? If he/she does so, is the transaction through the website, or does the teacher tell the student to just email him/her directly next time, and pay in cash? Or does the startup have a way or controlling, or atleast influencing that the transaction continues through the website? Also, does the student continue to look for other teachers in different subjects? The key is to increase customer loyalty, and prevent leakage. Common ways of doing this are loyalty programs, email marketing.

Gamificaiton

Gamification, or applying Game mechanics to everyday activities, is a trend thats super interesting to me.

Mint.com has already been known to apply game Mechanics to motivate people to achieve financial goals. Just today, Payoff.com announced a $2MM fundraising round. The intent of the site is to motivate people achieve financial goals

Payoff.com Product Explanation from Payoff.com on Vimeo.

Three problems. First, I get this error when trying to add an account to the site on the iPad. That is not good. It does not give this error when used on Firefox on a PC.



Second, effort involved in importing all my financial information (which is already in Mint.com) is too much. Especially as I run into more issues on my PC! For example, accounts were in progress of being added, and then I get this error.



And the third? Just by adding an account, I got a Super Saver badge. I have no idea what this badge means - and unlike a Foursquare Mayor badge, it has no significance to me. Especially since it is not proportional to my action!

The concept certainly is promising, and I sincerely hope that the product gets there too!

Fab.com's incredible year

Fab 2011 timeline

View more presentations from Jason Goldberg

Excellent post on Customer Acquisition for startups

Customer Acquisition & Monetization - Keys to your Business Model

View more presentations from David Skok

Web Innovator group demo companies

The Web Innovators Group started by David Beisel been one of my favorite Boston startup events for several years. I last went to one in 2008, and one event in which PunchBowl presented. Now having moved back to Boston, I found myself at the Web Inno 32 meeting.

The event maintains the same format: there are 3 main dishes: startups that present on the main stage, and several side dishes that have demo tables available to them. Selections are made by David, I assume.

The event has grown massively in size since 2008, reflecting the enthusiasm for startups in the Boston area. The caliber of the entrepreneurs presenting also seems to be much higher. Here are my reviews of the main dishes:

1. Best Vendor helps people discover business applications for tasks ranging from marketing to accounting; from note taking to personal productivity. Sign up is simple; you mention your 3 favorite apps, log in via LinkedIn, and you get application recommendations. The more you add applications and fill in your profile, the better your recommendations become.

The platform solves a legitimate problem; for businesses, it is not easy to find the best applications for a given category; for the companies making these applications, the cost of customer acquisition is pretty high. While the revenue model for Best Vendor is a little unclear, presumably they will likely depend on fees from the application providers in return for cheaper customer acquisition.

The one thing that was a bit lacking was the demo itself; I love demos that tell a story and present the application in Clayon Christensen's 'Job to be done' format. The idea is simple, but profound. Every product is hired to do a job. Present what job your product is doing, and then demo how it is doing that. Demo done. Instead, the demo featured on a bunch of features and moved haphazardly through different screens.

2. Kibits Labs was probably the coolest of the bunch; it is a IPhone application that enables rich group messaging. You really need to either see the demo or download and use it to experience it. The demo itself was presented very well; the CEO Matt Cutler discussed some real life use cases;he is a very successful serial entrepreneur and mentor at Techstars, and it is obvious that he has done this before. In particular the Thanksgiving case appealed to me. Let's say you have extended family, all of which cannot get together to celebrate. Instead, you invite everyone to a Kibits group, and its easy to share pictures, videos and keep it separate from all your other texting/email junk. The application shows updates, shifts between items effortlessly. With the coolness factor. Kibits won the Audience Choice award by a narrow margin.

3. My favorite was restaurant reviews site Tasted Menu. It solves a legitimate problem; how often have you asked a friend, or the server at the restaurant 'What is good here?' Well, hello Tasted Menu. It is very easy to find restaurants on the site, and look up top rated menu items. They are coming up with a mobile app soon as well. Currently they are based in Boston, but will expand to other cities shortly.

I find the team to be pretty impressive; a pretty young HBS grad as CEO, a UI designer from TripAdvisor, a Ranking and Reputation engineer from Google and a Food Anthropologist (yes, those exist) managing the food taxonomy. They have been around since 2009, and are likely to do very well.

















So here is to the next batch of Kick Ass Webb Inno companies!

Words of caution: Lean startup methodology

I am a big fan of the Lean Startup methodology, and related concepts such as customer development and minimum viable product. The Lean Statup Machine weekend was super helpful for me in learning and practicing the methodology more, and learning from an awesome set of mentors. As I learn this methodology more and more, there are some words of caution for newbies:

1. There is a big learning curve as far as practicing the methodology is concerned. Several pieces of it are science, and can be learned quickly, while others are more art than science. Take for example customer interviews. One has to learn how to structure customer interviews for maximum learning, from being flexible to focusing more on customer problems and not your solution. As you do more and more interviews, you do get better at them.

2. It is imperative that you select your interviewees carefully. What exactly is your target market? Often, one can build a solution for the general population, but identifying a particular target which might have the largest need for the solution is imperative. And one can stumble across this target by interviewing several potential targets. How do you determine best prospects? In words of Paul Graham, that is a function of "How much of a problem they have, and how quickly they come to a decision"

3. Asking if a prospect has a problem is also a tricky process. Let's face it, we hate problems. We do whatever we can to deal with them - come up with a solution, or rationalize them/fail to recognize that they exist. Let's take the example of buying an airline ticket. If you asked someone if they have a problem doing this twenty years ago, the answer would be no! I call up my travel agent or visit him/her, and in no time, I have my ticket. But then again, how easy is it to buy tickets online? If we cannot see a solution, we will likely rationalize problems. They key is not to have the whole population admit that there is a problem. They key is to find a few people who think that it is a big problem, and are willing to be your first customers, and to find a lot of other people who are willing to admit to it being somewhat of a problem, who will jump to the solution if it is really good.

4. Experts are often wrong. As the mentors at LSM NYC said, their opinion is also just one data point. They can probably give you the best advice on how to practice the methodology, but their advice is less useful on a particular concept.

5. It is great if you can have someone review your iterations - hopefully someone who knows about this methodology, but even someone who is just willing to be logical is good enough.


More to be added as I think of them....

Lean Startup Machine New York

This past weekend I participated in the Lean Startup Machine New York event. The event is dedicated to learning various practices of Lean Startups, particularly customer development.

On Thursday evening, we had a networking event to help form teams, and an introduction to the weekend. David Tisch, director of Techstars NY was a guest speaker. We continued the networking and team formation on friday evening, by when teams were solidified and teams started customer development.

I used the weekend to build on the Class Guru concept. I was lucky to be part of a team, which consisted of Vidar Brekki, CEO and founder of Social Intent, Seni Thomas, CEO and Foudner of Audience Amplify, and Paul Infield-Harm, Director of Product Development at Cyrus Innovation.

We started with discussions on the various directions that Class Guru could go in, and what problems people face in taking classes. While we had different perspectives on problems in taking classes, we were able to reach a consensus for a hypothesis by Saturday morning. From then on we conducted several iterations, each of which consisted of setting a hypothesis of the customer problem and the solution that we would provide, supporting assumptions and designing experiments on how to validate or invalidate the hypothesis. While we did do some facebook ads and landing page tests. By Sunday, we completed three iterations and presented our findings to the judges in a presentation.

The judges decided the winners based on how effectively they applied the customer development process. The teams that won this competition seemed to have learned the most; in most cases, they started with one idea, invalidated it through customer interactions and pivoted to another idea based on customer feedback.

I feel that I learned a lot about the customer development process; in particular how much can be achieved even during a single weekend. I have done customer development before, but it was the first time that I actually walked on the streets, stopping and interviewing random people. Excellent experience!

An open offer

I am working on a startup idea and currently building a beta version of the site to test the concept. Rails is such a great platform to code on, yet it has taking me a lot more time than I expected. I need help, and I have an offer. I know several readers of this blog are applying to Business School, and have a technology background. So here is my proposal.

You are a B School applicant with a technology background, and are proficient in ruby on rails coding. You can me in building my site by taking on responsibility of some of the coding, and help me with my code when I get stuck.

I am a Kellogg graduate, and have substantial experience in both applying to B School and reviewing applications of other candidates. I will help you with your application, without doing anything unethical. What does that means? I will help you build a strategy for your application, review your essays and offer my comments, and help you present your skills and experiences positively. What I will not do: tell you what to write, create a story for you, tell you what I wrote in my applications, or anything that will give you an unfair advantage.


So we both are able to use our talents, and help each other. Interested? Email me at shobhitchugh at gmail dot com.

Seth Sternberg on business co-founders

"My Job As A Pre-Launch Startup CEO Was To Buy Sandwiches"

Amazing Article, must read. We need more honest, down to earth MBA entrepreneurs like that.

David S. Rose on pitching to VCs

The reuse phenomena

I am a big fan of internet startups that help us improve our efficiency. Now efficiency is a pretty broad term, and people typically associate efficiency with time efficiency. Thus an application like Toodledo, designed to help manage tasks, falls into that category. Others, like Kayak, Yelp and The Class Guru, help people find the right things faster.

Another form of efficiency that interests me is 'material' or 'stuff' efficiency. There are so many things that we buy, which we use for a limited amount of time, but then, they just lie, gathering dust. What if we could reuse them for someone else's good, and perhaps make some money in the process? Following are some of the recent web startups that are working in this field:

1. Plurent.com - run by a friend of mine, this startup provides a peer to peer video game rental service. Video games gathering dust on your shelves? Rent them out. Or get new video games title for a price much lower than what you would pay for buying them new or used.

2. Thredup.com is an online exchange for children's clothes, works on a simple premise. Children grow up. Clothes don't. So rather than throwing away clothes, why not sell them to someone for a minimal fee?

As I look at these different examples, several critical success factors emerged:

1. Usability is at the top of the list. There is not much money to be earned by renting video games or selling old clothes, so using the site must be effortless.

2. The effortless piece extends to logistics; the sites provide pre-paid and printed shipping envelopes/packages, so that there is not much effort on part of the user.

3. Targeting of a product that loses use after some, but is useful to someone else. Old movies, video games, clothes work well. However, there are some behavioral issues that one must take into account. Let's consider video games; typically video games have several levels to conquer, and in most cases, video gamers love to go up to the advanced level, which could take several weeks. If that were the case, would it really be cheaper to rent the game vs. buying it? The answer is unclear.

4. Low shipping costs, which might eliminate books

5. Ability to transfer ownership of the product, which eliminates e-books.

6. A fraud proof system, which includes storing the credit card number of people renting the goods, in case they do not return it

7. Probably the toughest part comes from network effects. Growing the business initially is really hard, as you need parties from both sides of the platform to make the network a success. Sellers have no utility without buyers, and buyers have no utility without sellers. Businesses need to use some strategy to kick-start the network. Let's take the example of Thredup. I am not sure what the owners used, but one strategy would be to convince 50 to 100 of their closest friends and families to create clothes packages online; even give them incentive to do so. An excellent paper about two-sided markets can be found here (purchase required, but just google the title - there are a lot of free downloadable PDFs available online).

Good luck to these businesses!

Sources of Inspiration

What are your sources of inspiration? What do you do keep yourself from giving up, from continuing to work on that business, or that business school application, or that next big presentation?

I believe that working on the tasks and visualizing achieving the end goal is a powerful motivator to keep going. However, I try to practice regular routines to keep myself inspired.

1. Every 3 days or so, I watch a TED talk. I try to go and find an inspiring talk that is not necessarily related to anything I am working on.

2. I blog. Blogging requires one to reflect on one's life, and reflection often highlights to me all the great things I am blessed with. This inspires me to keep going.

3. I read. My reading list normally consists of business books with an inspirational flair. Currently, I am reading Onward by Howard Schultz and Do More Faster by Brad Feld and David Cohen.

4. I spend time with family and friends. This is a great energizer and inspires me tremendously. I am a pretty friendly guy in general, but its those few close relationships that I cherish the most.


What inspires you?

Punchtab

One of the best ways to be innovative is take something that works in one field and apply it to another. Punchtab aims to do just that; it provides a loyaly program for websites similar to hotels or airlines.

I was able to sign up and setup a reward for my blog in seconds. I was also able to setup rewards very soon e.g., 10000 points = $10 gift card for amazon. What I was able to figure out is how to setup feedback for actions e.g., if someone leaves a comment, how do I make sure that they get points? The only points that get automatically setup are for Facebook shares and likes. Then when I went back to the site, I wasn't able to log in. In summary, seems like an excellent idea, but not executed well so far.