Caterina Fake started Ludicorp in 2002. Ludicorp was a massively multiplayer online games company that allowed players to interact in real time. In 2004, Ludicorp added a photo sharing service that surpassed their initial venture in popularity, so Ludicorp became Flickr. It has grown into one of the most influential examples of Web 2.0 technology and was acquired by Yahoo in 2005.
One interesting fact about Fake is that she is married to her co-founder. She is taking commitment to the venture to a whole new level. In the beginning, Flickr began development on a photo sharing website without thorough analysis of the industry or the creation of a business plan. This contributed to the success of Flickr – if the founders would have done their due diligence research they would have determined that photo sharing has not worked yet, and they would be foolish to enter the field.
Flickr’s naivety in field paid off. They created a great product that people love – they created their own market with a breakthrough product. This is refreshing because most entrepreneurial thought is centered around building a product around a market, but Flickr proved that if something is innovative then people will use it, regardless if they fit into a certain market of demographic.
Flickr is the textbook example of web 2.0 – integrating blogging and social networking and capitalizing on the widespread adoption of broadband internet.
Joel Spolsky founded Fog Creek Software with Michael Pryor in 2000. They did not have a specific product in mind, but wanted to start a company where they (and other top computer science talent) would want to work. Joel’s blog, Joel on Software, helped get his startup off the ground. He created a very popular blog among software developers around the world. Fog Creek is based out of New York City and writes software for bug tracking and remote desktop. Fog Creek has doubled its sales every year (even during the dotcom crash) and have never taken outside investment.
I find it very notable that Fog Creek has never taken outside investment. One of the reasons for this is that they did not want an outside venture capitalist to pull the company in any direction. This demonstrates organic growth – they did not grow too quickly, and that is why they are sustainable. The interview in Founders at Work describes the growth process as a more traditional business rather than a fast web startup. This makes sense because Fog Creek was formed as an anti-dotcom company. Spolsky saw that most internet startups were overvalued and their founders were inexperienced.
Joel describes Fog Creek working as a software consulting company as a means to an end. Fog Creek was doing consulting work while building a software company internally. Fog Creek (and most other consulting companies) paid their consultants $60 an hour and charged them out at $250 an hour. This worked great until the market disappeared for highly paid consultants, so Fog Creek became a traditional software company (like they had planned).
The story behind fog creek is really interesting. It fits with the “made by programmers, for programmers” because their employees are highly paid and have some of the best amenities in the industry (Below picture is the office - from this album).
Craig Newmark is the founder of craigslist, one of the highest trafficked websites on the internet (26th highest according to Alexa.com). Craigslist started as an e-mail list for events going on around the San Francisco Bay area. After growing in popularity, he turned the list into a website. From the beginning of his venture Newmark was dedicated to building a community on the internet, and wanted to keep the site as ad-free as possible (much like this blog :) ). The site has always has held the user experience in high regard, and that’s one of the reasons that the site is so popular. Craigslist is able to operate as a small organization, even though they manage postings from over 300 countries.
Newmark got the idea while working at Charles Schwab in 1994. He was adamant about the transition of equity brokerage to be conducted online. After dedicating the majority of his time to Craigslist, he allowed users to post Web pages automatically. In 1999, this was a breakthrough because web technology was still relatively new and unproven. Newmark claims that the biggest entrepreneurial lesson that he learned was to follow your instincts. He realized that he was not a good manager, so his CEO (and first hire) is a great manager. Newmark mentioned that he primarily does customer service on his site – which is really cool. He spends most of his time dealing with apartment brokers in New York City.
I found this to be very interesting. Newmark, the founder of the company, does primarily customer service. He said that he sometimes uses George Costanza magic when acting as the public figurehead of the site, but the majority of his week is customer service.
The Craigslist community has a culture of trust and goodwill, which makes it unique as far as internet communities go. Craigslist users share the same moral compass of the founder, which I found to be very interesting. Much like a normal community, it is self policing, and Newmark has found that the majority of people want other people to play fair. The reason for the strong community is the relatively slow growth of Craigslist; they’re the tortoise, not the hare. The site grew slowly and has adapted over time, much like a real-life community (Below image courtesy of Hitwise).
The phrase Shovel Ready, taken from its roots in government is defined as a project that has been fully vetted and approved at the state and local level. In order to call a project shovel ready, one must be able to break ground the next day and begin construction. Shovel ready can be applied across many different types of projects, not just ways to spend that Obama money.
Having a project that is shovel ready plays a large part into whether or not it receives funding - Chancellor Perlman hinted at this with UNL receiving federal funding for the innovation campus expansion.
This same principle can apply to software projects. Having a software project shovel ready involves any or all of the following (please note that this is an abridged list):
I am a firm believer in starting a development project strong - this is especially important in Agile software development (the top principle). The faster a team can produce working, accepted code, the happier clients will be. This can play a huge role in the life of a project. A young project that covered its bases from the start will have a higher probability for success.
Entrepreneurs often claim that they have projects that are shovel ready and are waiting for the shovel (funding) to get the project moving. This is an indication that the project in question is not shovel ready. It does not take millions of dollars of funding to get a software project started. Grab a few friends and crank out a detailed prototype of a feature of the product. Coupling this prototype with a business plan will ensure that the project is shovel ready.
At the Heartland Conference for Free Enterprise, I heard Chancellor Perlman speak about research expansions to UNL. The new expansion - formerly the Nebraska State Fair Park - is being dubbed the Innovation Campus. The campus would link the City and East Campuses of UNL.
The talk was very interesting. People have said that Harvey is a boring public speaker, but I must have caught him on payday. He was enthusiastic about the Campus expansion, and even poked fun about having Ben Nelson carve out a share of Obama money.
The research corridor (ripped off from the research triangle in North Carolina) includes renovations to the Whittier School, a new physics building, the Ken Morrison Life Sciences Center on east campus and another Agriculture related project - the latter two renovations receiving some form of Obama money. The Whittier School, which has been a vine street eyesore for 30 years, will host a number of new programs, like:
A Federally funded transportation research center - So if anyone from the coasts ever ends up in Nebraska they will be able to find their way out.
Harvey went into details about how these large projects are developed, which was interesting, but I'll save that for a future, more detailed post. The main point that he made about the progress on this expansion is that it takes many years to get these projects off the ground - a similar project in North Carolina took 20 years. It takes a tremendous amount of time and effort to coordinate UNL, State and Federal money - all the while making sure that everyone's back is getting scratched.
Harvey, like all other UNL leaders (except for Study Abroad), want to keep the young people in Nebraska. This project would attract more companies and goverenment agencies to UNL for research, because they cannot afford it anymore. With more research, more jobs are created, which will retain more native Nebraskans.
After the talk, Harvey left time for questions. Of course, someone out of the 150 or so people in attendance had to burst out the idea:
"Why don't we build a monorail to connect city campus and east campus." This of course made me think of the Simpsons (Monorail! Monorail! Monorail!)
Lets be serious - Las Vegas built a monorail in 2004. It cost them around $100 million per mile. They built it because there would be rougly 250,000 visitors in the city at any given time. This is the Rolls Royce of Monorails (and believe me, I know my Monorails). A more realistic Monorail would cost roughly $35 million per mile. We have to move a few hundred students 20 blocks. Please - no more monorails. We don't want Lincoln to turn out like North Haverbrook.
This project would benefit UNL greatly, and solidify it as a premeir research university. The project also carries loads of risk; expanding UNL's city campus is a cruel game of tetris. Heavy use rail lines to the north and west, downtown to the south and the sheer amount of ghetto to the west make the State Fair park the most logical area of expansion.
It should be interesting to see how the Innovation Campus pans out. But please remember, no Monorails.
I recently (I'm very late with this post) attended the Mentoring by the Masters round table/web cast presented by the Nebraska Center for Entrepreneurship. The main reason that I attended was for a class requirement - but I think I would have gone anyway (of course I would have). The master Entrepreneurs in attendance were Joey Knecht of i2rd/Vipa Solutions, Carol Farnham of Signa Solutions, and Eric Dinger of Thought District.
The talk was web cast to several other Nebraska college campuses through an awesome room in the teachers college. The place was full of flat screens and microphones - easily 20 thousand dollars worth of equipment. Of course it was not working correctly, so the talk got started 20 minutes late.
The content covered basic Entrepreneurship questions: What was the hardest part of starting your business? What is the one thing that I can do to make me successful? Questions along those lines. The content was not mind blowing, but Dinger and Knecht would crack jokes whenever they spoke to keep things interesting. Dinger's answers were effective and concise - which I greatly admire.
Other sites had their masters on hand as well, but I did not find them nearly as interesting.
Carol Farnham mentioned lighting darkfiber for distributed computing between universities - which I thought was the coolest topic mentioned during the web cast. Dark fiber is also an awesome name, and the phrase "light the dark fiber" sounds straight out of a fantasy novel.
Before the talk started, Knecht was talking to the group of students in attendance - nearly all of which were in a new venture management course. He asked the group, "So what are you going to start? And don't tell me it's another stupid bar."
This made me chuckle, because about half of the students in the management class are writing business plans for some form of bar or restaurant. However I quickly straightened up, because M7 is developing software to make losing sobriety that much easier.
Don't discount HappierHour. It took creativity, engineering knowledge and discipline to get the app up and running (and we are far from done - Follow Us!). The end goal is like any other venture, to add value to a large group of users.
The in-class presentations of our pseudo-Imagine It presentations were presented earlier this week (Thursday). The quality of the talks surprised me, and I enjoyed hearing the other ideas for adding value.
My four man team was given pencils as our basic object for the exercise. Since the exercise spanned the 2009 Presidential Inauguration and the pencil is a writing utensil, (not as popular as the Pen) we solicited opinions from our friends and professors to see what they thought of the Inauguration. The opinions varied from "I don't give a shit" to "One of the best days in American History." Everyone's opinions were interesting to me because I don't really hear many different opinions about anything.
Getting back to the whole point of the exercise, which was creating value from something as benign as a pencil. We didn't sell the opinions for a profit - so where was the value that we created?
We created social value. Something that cannot directly sold but still improves lives. I say directly because with some work (much work in our case) we could spin the idea into a marketable, profitable piece of intellectual property. Take the example of the "picture a day for a year" meme, and the different ways it has been adapted for more value than social value. Granted that time-lapse commercials have been around for a while, but the picture a day Youtube videos resurrected time-lapse ads.
So we can morph social value into monetary value by getting people to pay to see it or by putting it in a box for people to take home (commercialization). But what if something of purely monetary value is created and social value is drawn from it (decommercialization). This process is a bit trickier.
Take compound interest, something Einstien thought quite highly of, and try to draw social value from it. We can teach people math using it as an example or donate the money to someone in need, but that's stretching.
Last week in my new ventures class we watched a half-movie (trailer) about a creative thinking exercise called Imagine It, which is part of Stanford University's Entrepreneurship Week. Imagine It is an exercise where small teams of college students try to add value to basic (turns out unimproveable is not a word) objects, like Post-It Notes. The teams are given five days to create their plan and present for judges.
Imagine It is not a product improvement contest, so teams were not changing colors or making the notes wider. The Post-It Notes were used in the contest as a tool through which the students could focus their creative, world-improving ideas. One team solicited strangers for music notes (one note per Post-It) and composed a random song. Another team, from a developing country, asked community members for ideas in creating a new constitution and presented it to the constitution rewrite committee.
In my class, we split into small teams and are currently working through a less intensive version of the Imagine It exercise. This is one of the very few times in my collegiate career where I have been required to use my brain creatively. This begs the question:
When (if ever) do we lose our creativity?
Is it after high school? After college? When you have kids? I have been witness to glimpses of creativity from people of all ages, but is there going to be a point where it drops off?
In a perfect world, I would like to think that every person has the same level of creativity. Just like everyone has (nearly) the same amount of blood in their body. Here is what I would wager: some people who the world recognizes as creative, like Da Vinci or Tufte, are very, very boring to talk to. Other people, with no artistic bone in their body, could tell you a story that would leave you in stiches or they could feed a family of 10 on $50 per week. Then there are people with no talent whatsoever; completely vanilla. If I am going to win my bet, then they must have the most outrageous and vivid dreams (anything to take them away from their boring, awake time).
Ok, so after I win my bet, it comes back to Imagine It. It would be a really great experiment if the same teams repeat it 10 years later. Some of their creativity has to be refocused into their family/friends (or even their job). Will they still win the contest? Can they still impress the creativity judges?
Random Thought: If I were a life coach, I would not have my life together at all; smoker, drinker, all around hater. It would make landing a TV show a piece of cake, chocolate cake.
