Failcon SF 2012 – Notes

I dropped by Failcon today which is FailCon is advertised as a “one-day conference for technology entrepreneurs, investors, developers and designers to study their own and others’ failures and prepare for success.” It was the kind of conference that I normally would really enjoy. A small enough crowd that you’re not overwhelmed and a venue (Julia Morgan Ballroom in downtown San Francisco) that was downright clubby.

Unfortunately, there was quite a lot going on at work today so I was not able to devote as much attention the the talks as I would have liked. I missed the morning talks so I only have notes from a few talks, what follows are my notes.

THE HISTORY OF FAILING TO LEARN FROM FAILURE – Scott Berkun (@berkun)

There is no “single” point of failure

– We only get to the truth after the 5th “why?” – keep asking “why?” to get out of the weeds and uncover systemic and procedural failures.
– For example, it was not o-ring on Space Shuttle that failed, nor the representation of the data from the o-ring temperatures. If you keep asking “why?” you will start to find the process which led to failures to produce poor reports that hid early, non-catastrophic failures of the o-rings that would have raised a flag to prevent the catastrophic failure that caused the Shuttle disaster.

Complex truth loses to Simple Lies

– Simple stories are fun to tell but they also are lies that hide the more complex truth
– There is a narrative bias. The teller of the story shades the truth to augment their perspective.
– Titanic, Hindenburg, New Coke – these are not just trivial failures that can be summed up in a simple story. There are multiple perspectives that tell the full picture.

Our own egos get in our way

-Heroes are inspiring, yet stupid. To be heroic, you need to ignore common sense.
– There is little that can be learned from these inspirational heroes because they will not give you the full truth, the real lesson.

We tend to fight the last war, not the war we’re in.

– Our most recent victory (or defeat) colors the challenges before us.

Scott’s blog post on his talk.

FAILURE AND ITS ROLE IN THE LEAN STARTUP – Eric Ries (@ericries)

– “In order to get to MVP, take what the founder thinks is a good first product and cut it in half. Then cut it in half, again.”
– “Lean startup is a methodology made for businesses going through times of extreme uncertainty. Not to be applied if you’re buying a franchise, or making Madden 2012.”
– In front of VCs, we play “success theater”: using vanity metrics to avoid the smell of failure. The unit of progress is learning, not number of users, not revenue.
– The most important thing to do is start. The start will always fall short of the vision. Don’t think, “I’m not wasting my time with seeds, I only want trees.”  Where do the tress come from? Seeds.

PIANOS, BATTLESHIPS, AND SNEAKERS: STORIES ABOUT DESIGN AND FAILURE – Braden Kowitz, Google Ventures (@kowitz)

– design blindness, ideas that you come up with make sense to you but are not obvious to others
– in order to get others to understand, you need to get critique early and often.
– hard to do when you’re a designer because you want to wait until it’s done.
– if you wait until you’re done, you’ll be too emotionally invested and will resist objections.

Three stories about failure
Piano Fail
– You can’t learn the piano by reading a book about it. There is no “Piano for Dummies” book.
– To learn a craft, you must practice that craft. Learn by doing.
– Helps to find a tutor. Someone who can show you the way.

Battleships
– Design something, show it to people, they don’t get it, you fix it, they still don’t get it. It’s a vicious cycle because with each turn, you lose the fresh perspective of people who have never used your product.
– Evolution of GChat on-screen instructions. Didn’t know to hit to send chat. Didn’t want to add [Send] button on a product that was embedded in Gmail. Confusion with pop-up advertisements. Whack-a-mole.
– Need to listen to people, look in their eyes to get to the bottom of the secondary fail.
– Sometimes a fix is just a very minor adjustment.
– Like the game of Battleship, even if you’re good, you’ll miss a lot. You only get better incrementally.
– People are a moving target. What works today will not work tomorrow. Design in the present.
– Just a few years ago, “Pull to Refresh” on iOS was not known even to Apple. It was developed by a third party. It’s expected now.

Sneakers
– Like running. It’s good to have a buddy to help show your stuff. No one wants to run alone in the rain.
– Schedule the user study ahead of time, it’s a forcing function.
– One day design sprint lowers expectations. No one expects perfection after a few hours. Best way to break out of a rut, to try out a new approach.

For more, check out this excellent series on designstaff.org on how to run a 5-day Design Sprint

HOW NOT TO MANAGE A PRODUCT – Mike Arsenault (@mikearsenault)

– Grasshopper built a “Refer an entrepreneur” program to allow their users to share a discount. These refers converted at 22%, orders of magnitude over their other marketing efforts which were around 1.5%. Because these refers were so successful, it became the vision for a new type of product which became Spreadable, a customized “tell a friend” widget to put on your site to help your customers, “spread the word.”

– What happened? They blew thru $500k in 14 months and ended up having to shut down the site because of lack of interest.
– Mike shows a clip from their explainer video and then notes that the full video was 3 mins long, pointing out that most people lose interest after 60 seconds.
– 12 people joined to work on the project. Many were seasoned from the previous business which gave them (over)-confidence. Bigger Team does not equal Higher Velocity
– The new product was benchmarked against the metrics that made Grasshopper (7 years old, 40K customers) a success. There is no way a startup could measure up to an established business. Churn was too high, they didn’t talk to customers that were leaving. If they did, they would have learned the widget was not performing for those that managed to install it.
– The marketing channels that were successful for Grasshopper did not work for Spreadable. Lower search volume for organic search keywords for this product as well.
– Product required much more hand-holding than Grasshopper. Advertised to radio audience that was not technically proficient to install javascript.
– Wasted our Beta List. 2000 people on the list were not invited to get involved until after the launch. Beta people wanted to get involved early. Need to keep the list “warm” with regular updates.
– Didn’t charge on Day 1. It was in the market for 6 months for free. Putting a price on a product is a quick way to get feedback on the product’s usefulness. Price helps you measure. If people pay, feedback is more pointed.
– Too hung up on marketing, not on building the right product.

SOCIAL PROOF IS NOT PROOF – Michael Wolfe, Pipewise (@michaelrwolfe)

Lessons from ccLoop, finalist at TechCrunch NYC Disrupt

– Compelling team, great investors, Big Problem (enterprise inbox 2.0), Social Proof (press) = failed after 4 months
– Why?
– Basecamp, Yammer, Chatter, Sharepoint, MS Project – all useful and compelling but ultimately fail b/c they compete with the inbox. Michael surveyed the room on Basecamp and Yammer. Most everyone has heard or used these but very few have used them in the last 24 hours.

– Fail #1 – Team Fail.
CEO was in customer validation along with many other things. Need a dedicated Hustler. Every engineering team needs a hustler. Engineers just ask obvious questions. They validate the solution, not the problem. “Do you have an email overload problem?” is not a useful question. Validation is not “selling the product” – done right, customer validation is about making future customers pay you to build a product.

– Fail #2 – Product Fail.
Lots of Likes is not as a good as a handful of “loves” (even if that handful comes with some haters). Better to have passionate users.

– Fail #3 – Social Proof Fail.
The echo chamber for friends and family prior to launch reinforces bad decisions. Seek out fresh perspectives. Do not be swayed by the tech media.

 

iPhone 5 & First World Problems

Saturday Night Live did a pretty good job sending up the Tech Press’ whining over the iPhone 5 problems as out of touch with the world in which we live – especially when compared to the world of those that work in the factories that make these wonder devices.

Chris Sacca on TWiST

Jason Calacanis interviews Chris Sacca on This Week in Startups. It’s an amazing, 2-part episode full of straight talk about the current state of startups. There are many great stories and interesting nuggets of information sprinkled throughout. I’m still listening so I’ll update this post with my favorites sections but feel free to share your favorite bits in the comments below.


Part One shownotes

Three things that are in the “founder gene”

  1. Ev Williams doesn’t see that failure is a possibility. He’s like one of those free climbers they can climb a mountain without ropes but they never fear the consequences of a fall.
  2. Travis Kalanick (founder of Uber) is an unreasonably fast-moving person. Travis will show you the expansion plan and it makes me nervous.
  3. Kevin Systrom (co-founder of Instagram) is magnetic. Look into his eyes and there’s no doubt he’s going to succeed with his vision for his company.

20 mins into part one, Chris talks about how he dug himself out of a huge financial hole where he was millions in debt.

1 hour in Chris talks about his fund, Lowercase Capital, and how he has nearly $1B under management. His newest investments are in content production companies, a space he’s been watching closely for years and now thinks is ripe for investment. The capital costs of producing content have come down dramatically and you now have high production shows such as This Week in Startups and Leo LaPorte’s This Week in Tech that can be produced at a fraction of the cost of what they used to cost just a few years ago.


Part Two shownotes

Chris managed Google’s $4.7B bid for wireless spectrum. Thanks to their participation, the FCC added the stipulation that the winner of the bid honor open device and open access. Chris reminds us that this is why Verizon LTE iPhones are unlocked.

At 1:50:15 Chris and Jason turn to talk about the sorry state of middle America and how it’s been impacted by politics. Chris refers to a post by Spark Capital VC Bijan Sabet and his post of what it was like to attend a private event with Barak Obama.

 

Silicon Valley the Reality Show

Coming in November to Bravo channel.

This has happened before. The bright lights of Hollywood shine their lights into the Valley and all hell breaks loose. Let’s see if we’ve inoculated ourselves this time.

The real question is, do you need cable TV to watch each episode?

Information Overlord

What if we follow Augmented Reality to it’s ultimate conclusion. Daniel Suarez’s vision of a layer of information and meta-data transposed upon the physical world may be the science fiction of last year but we all know if Google’s Project Glass gets it’s way, it’ll be here soon enough.

Things only once written about and mocked up by expensive design firms are now becoming commercial reality.

But what if we took this further? What if the commercial pressure to monetize our new experience pushes the development to it’s ultimate conclusion? What would that world look like? Behold.