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CATEGORY: Business

How Crypto Marketing is Different than Other Industries

Changing rules and regulations, the presence of scams, a larger number of target segments, and many other reasons make crypto marketing very different. 

Over the course of my 20-year career (yup, I’m getting old), I’ve done all kinds of marketing in many different industries. 

I have experience with content marketing, traditional and online advertising, event marketing, branding, analytics, market research, and many more. I’ve worked in software development, cloud computing, sports, consulting, government contracting, and a bunch of other industries. 

I’ve recently started marketing and growth consulting for a couple of cryptocurrency companies, Meter and Hydro Labs

And I’ve learned very quickly how different marketing for these companies is, compared to the other industries I’ve worked with. It’s like night and day. 

Here are the primary differences I’ve identified and will dig into:

  1. There’s more of a focus on community
  2. The rules are always changing
  3. Scams are abound
  4. There are many more target segments to engage with
  5. Current users have a strong focus on privacy, pseudo-anonymity, and security
  6. We have no direct control over token price
  7. Understanding the tech is more important 

Let’s go!

1) There’s more of a focus on community

Because we’re so early, there aren’t clear business and revenue models in crypto, nor are there definitive, proven ways to market these products. 

That’s why building a strong, engaged community is so important in crypto. 

Community is absolutely important in other industries to build brand loyalty. Brands like Harley Davidson, LEGO, and Sephora have garnered passion and loyalty by cultivating strong communities. 

But they are even more critical in crypto. 

While Bitcoin and Ethereum are very innovative technical products, their passionate communities are what separate them from the rest of the cryptocurrencies. 

A cryptocurrency’s value can be driven solely by the strength of its community and memes that come out of it. Founder of Scalar Capital Linda Xie wrote a great article on how memes can help build passionate followings and highlighted the Dogecoin case study. 

Dogecoin is a cryptocurrency that started out as a joke and has absolutely no real-world use. But it has a market cap of over $200 million primarily because of a fucking Shiba Inu. 

Dogecoin meme
Dogecoin is a great meme. Image courtesy of CoinNewsSpan

Building and consistently engaging communities on Twitter, Discord, Telegram, and other social networks allow you to converse with your members, communicate the benefits of your platform,  and garner feedback consistently.

Community reigns in crypto!

2) The rules are always changing

It’s early days in cryptoland. No one really knows what the rules are, which makes marketing really difficult. 

Let’s start with the laws that are set by the SEC and CFTC. While some countries like South Korea and India have clarified their crypto regulations, the US’ laws have massive gray areas that make crypto companies unsure about how to operate. 

Are cryptocurrencies commodities or securities? What makes them one or the other? Can they start as one then evolve to become the other? 

Too many questions and not enough answers. 

The lack of clarity on the legal front leads to opacity on many marketing platforms. Facebook, Instagram, Twitter, and Google have all banned crypto ads at some point, and many other smaller ad platforms follow suit. 

The rules about posting crypto-related content keeps changing as well. One day you can post as many videos about cryptocurrency on YouTube, the next day you’re banned

Again, that’s why building a strong community is so important. No one can take your community away from you. 

While many of us marketers pride ourselves on being agile and flexible, the constantly changing rules and regulations make doing our jobs really tough. 

3) Scams are abound

One of the reasons the rules and regulations are always changing is because of the myriad of scams that occur in the crypto space. 

ICOs introduced an innovative, democratized way for companies to raise funds outside of traditional venture capital and banking channels. And thousands of crypto companies took advantage of this during the ICO boom of 2017. 

While many of these projects are still alive and kicking, the vast majority of them were scams that made their founders rich and fleeced their investors. 

Everyone knows about Bitconnect, the massive exit scam that promised earnings of 1% daily and up to 40% each month. 

Hey hey heeeeeyyyyy! Bitconnnneeeeccccctt!

More recently, the PlusToken scam attracted investment of more than 200,000 bitcoin, 1% of outstanding supply.

The presence of scams like these makes marketers’ jobs tough in a number of ways. 

First, if you’re marketing a crypto protocol, you may face skepticism that your platform might be a scam. 

The abundance of scam ICOs have given people token PTSD. Thus investors, potential users, and the broader industry may harshly criticize your pre-sale tactics, token economics, and many other aspects of your platform and deem your project a scam, when it’s really not. 

Next, many service providers may not allow you to use their products, or make it more difficult to do so, simply because you work in the crypto industry. 

I mentioned earlier that ad platforms like Facebook and Google have changed their crypto marketing rules many times.

Currently, I am going through an onboarding process where an email service provider is asking questions about one of the companies I consult with. They want to make sure we’re not using their email platform to run a scam, and they want to maintain their high email deliverability rate. While I can’t blame the company for doing this, it’s annoying. 

Finally, partnerships are important for growth in crypto. And because it can be difficult to identify a crypto scam, we have to be super careful in doing due diligence of companies we partner with. 

In traditional industries, it’s much easier to identify bad actors. If a traditional financial institution is registered in Malta or the Cayman Islands, that raises a red flag. In crypto, that’s the norm!

The Cayman Islands has very crypto-friendly regulations as opposed to larger, more established economies. And the majority of crypto trading volume takes place on Malta-based exchanges.

It’s definitely tougher to identify scams in crypto, which makes in-depth research and due diligence for partnerships much more important. 

4) There are many more target segments to engage with

If you’re marketing a product in sectors such as consumer packaged goods, financial services, or other more traditional industries, you typically have a clear end user you’re targeting. 

For example, if I’m marketing wealth management services for Morgan Stanley, I’m likely targeting upper-middle to upper class people with stable incomes and a solid net worth. In general, most of these customers will have similar life goals and respond comparably to my marketing message. 

If you’re marketing a crypto/blockchain protocol, you have many different types of end users you need to reach. 

You may need to recruit developers to build on top of your protocol. 

You may need to engage miners or validators (depending on whether your protocol uses Proof of Work, Proof of Stake, or other consensus mechanisms) to help secure your network. 

You’ll have to interact with investors, whether they are venture capitalists looking to fund your project in exchange for equity, or retail investors who want to trade your coins for profit. 

You’ll need to work with exchanges to get listed so retail investors can buy, sell, and trade your coin. 

You may need to build mobile or desktop apps for your cryptocurrency, so you’ll have to work with end users to ensure that you build a great product experience. 

If you’re building the next iteration of money, you may have to work with merchants and retailers to get your cryptocurrency adopted for payments. 

Even within these segments, you have to understand where on the educational spectrum they lie. Are they crypto newbies or experts? Are they learning how to build on blockchain for the first time, or have they been creating advanced smart contracts for a while?

There are so many more audiences you need to engage and many different levels of knowledge, which makes crypto marketing very different and more difficult. 

5) Current users have a strong focus on privacy, pseudo-anonymity, and security

Bitcoin was built in large part in response to the economic bailouts received by big banks after 2008’s economic crisis. The OG of cryptocurrencies aimed to circumvent the centralized control and poor monetary policies set forth by governments. 

Bitcoin’s genesis block alludes to the 2008 financial crisis. Source: Bitcoin.com


As such, censorship resistance, privacy, pseudo-anonymity, and security are core tenets of the cryptocurrency industry and are paramount for much of the current user base.

These are certainly admirable principles but they don’t make a marketer’s job any easier. 

The data we collect on user behaviors helps us understand how our products are being used and how we can improve them. Tools like Google Analytics, Mixpanel, and Amplitude, allow us to gather data on product usage and unearth user insights. 

In crypto, it’s much more difficult to track and analyze user behavior due to the focus on anonymity and security. 

I recently spoke with a founder who is building a decentralized marketplace about how he measures activity on his platform. He said that it’s tough to call the merchants who run stores on his platform “users” because he knows very little about them and who they are. Rather, he has to resort to the more literal, technical term “nodes” (each merchant runs a node), and he has very limited data about these nodes. 

It’s very difficult to perform feedback surveys and user interviews because many times you have no idea who your users are! That’s why building a strong community is so important. 

There is an opportunity for crypto marketers here though. If you are willing to put in the effort to discover who your customers are, interact with them one-on-one, and really get to know them, you’ll be ahead of the game. 

6) We have no direct control over token price

Pump it! To the moon! 

Token price is such a big part of the success of a crypto protocol. When the price of the token goes up, community engagement and sentiment increase, and more investment money flows in, causing a virtuous cycle. 

And we, as marketers, have such little control over that. 

Yes, if we build great protocols and products, market them well, and gain lots of users and revenue, theoretically the price and market cap of our token should go up. 

But at this early stage of the industry, there’s no way to really guarantee that. 

In traditional markets, the correlation between company performance and an increase in stock price is much higher for publicly-traded companies. Investors have tried-and-true ways of valuing companies, such as Discounted Cash Flow, asset valuation, and comparable company analysis models, so they have a pretty clear understanding of how to correlate certain factors to company success and a rising stock price.

Even non-crypto startups are easier to value because there is much more historical data to analyze. Chamath Palihapitiya’s VC firm Social Capital is famous for using a data-driven approach to assess potential investments by comparing the growth rate of those startups to that of its portfolio companies. And tools like Crunchbase and CB Insights allow investors to access tons of data to analyze and value startups.

Data tools that help investors analyze the quality of a crypto project are getting much better. Companies like Messari, Nomics, Kaiko, and many others aim to provide reliable, enterprise-grade market data. But we’re still early. 

And as crypto marketers, all we can do is put our head down, ignore the noise, and not try to look at the price too often (unless it’s going to the moon, of course). 

7) Understanding the tech is more important

If you’re marketing a customer relationship management platform, you don’t really need to communicate that the software is built with ReactJS on the front end, Python on the backend, and is powered by AWS EC2, RDS, and S3 cloud technologies. 

If you’re marketing a blockchain protocol, you will need to know what consensus mechanism your protocol uses, how the network’s security is maintained, and many other technical aspects. 

Even if you’re building products that aren’t protocols, such as a crypto wallet, a decentralized finance application, or a blockchain video game, the emphasis on security forces you to be knowledgeable about how your application will protect users’ funds and identities.

And all of this technical knowledge is no joke.

Conclusion

Marketing in cryptoland is very different from marketing in more traditional industries. 

Changing regulations, the presence of scams, a larger number of target segments, and many other reasons make crypto marketing a different beast. 

I believe that marketing crypto is much more challenging. But it also provides us with an opportunity to be innovative and lay the groundwork for best practices. 

And it’s super fun!

What are your thoughts on the differences between crypto and traditional marketing? Did I miss anything? I’d love to hear from you!

I hope you found this interesting! If so, please share this article with the share buttons on the left. 

Then sign up for my email list below and connect with me on Twitter for future updates.

Big thanks to fellow crypto marketers Jordan SpenceAlex Masmej, and Emily Coleman for contributing to this article. 

Process > Results

I recently listened to the book titled Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by poker champion Annie Duke

Being a poker player, I was naturally compelled to read this book. And being an entrepreneur, I totally understand the difficulty of making decisions with little information. And Thinking in Bets crystallized this concept really well. 

The premise of the story is that in poker (and life) you have to make decisions with imperfect or very little information, and due to luck, the right decision may result in a negative outcome. 

For instance, before the flop comes, pocket Aces is the best hand in poker. So it’s always the right decision to raise pre-flop. But against another pocket pair, there is an 18% chance you will lose. So if your Aces get beat by another pocket pair, were you wrong for playing your Aces the way you did? 

On the flip side, you can make a terrible decision and play your hand like crap, and still win.

Here’s another example. In Super Bowl XLIX, the Seattle Seahawks had a 2nd down at the New England Patriots’ 1-yard line with 26 seconds left on the clock and a chance to win the game. They had one of the best goal-line running backs in Marshawn Lynch. But head coach Pete Carroll decided to call a pass play, and Seattle QB Russell Wilson threw an interception to end the game 

Many have called this the worst decision in football history. 

But what if Russell Wilson threw a touchdown? What would people have thought about Carroll’s decision? They would have likely said that it was “gutsy”, “brave”, and “fearless”.

In reality, the decision actually made sense, primarily due to clock management and the defensive formation the Patriots ran. I won’t get into it here, but you can check out this Slate article and this SBNation article for more info. 

We all make decisions with imperfect information.

Maybe it’s a decision to hire someone for your team at work, and that person doesn’t perform as expected. 

Maybe you decide to buy a new house in a great neighborhood, but a black swan event happens and the house’s value goes under water. 

In both cases, you could have done all of your research correctly, checked off all of the boxes, dotted your T’s and crossed your I’s. But sometimes things happen that you have no control over. 

If this happens, do you doubt your decision-making abilities? Do you not trust your process anymore? 

Certainly, you should try to find the holes in your thought process. Did you not see something you should have seen? Did you not do enough research? 

But if you’re confident you did all you can do, you shouldn’t doubt yourself just because the outcome wasn’t positive. 

If the outcome turned out the way you expected, I’d bet that you would think you’re a genius, right? Right. 

So the point of this all is to separate the outcome from the process. Whether you were right or wrong, you can’t let the result of your decision cast doubt on the work you did to get there. 

I think this is a really important mindset to have. Process over results!

Have you been in any situations where you thought you made a correct decision that turned out negatively? I’d love to hear your thoughts!

Is the startup you’re building big or cool enough?

I think about this a lot.

Is WinOptix is a big enough idea? Is my target market big enough? Is the concept interesting or impactful enough?

A lot of this “big enough” doubt comes from reading a lot of tech and startup news.

“Startup X raises $50 million dollars and now is worth $2 billion.”

“Startup Y has $100 million in revenue with no marketing.”

“Startup Z goes public, the stock pops, and the company is now worth $5 billion.”

I need to stop reading all of crap.

The fact of the matter is that I don’t know if WinOptix is big enough yet.

Yeah, the government contracting market is really big, like trillions of dollars big. But at the moment, I’m only targeting IT service providers, which is much smaller.

Can the product be eventually sold to other types of government contractors, or additional markets outside of govcon, so that the market gets much larger? Maybe. But I don’t know. I’m not there yet.

Here’s a post from Rob Go of NextView Ventures that talks about the “market size fallacy” for seed stage startups. That post makes me feel better every time I read it. It basically says, “you don’t know until you find out.”

And the product is in such an early phase that I don’t know if it will be cool or impactful enough.

There’s been a good amount of interest from prospective customers and partners. Industry experts believe in the concept and like what they see in the product. But I won’t really know how impactful the product will be until I get more paying customers.

There’s a lot of things I don’t know. But that’s OK.

So if you’re not sure how big your market is or how impactful your product is, that’s OK too.

Maybe your company isn’t venture scale. Maybe it is. So what?

Maybe your product is in a boring industry. Or maybe it’s in a hot sector like AI or blockchain. So what?

It’s tough to stop having FOMO, but it’s necessary. It’s hard not to think about chasing the shiny object. I think about cooler technologies and products all the time. But it just takes my focus away from what’s important.

So is the startup you’re building big or cool enough? Don’t worry about it, it probably doesn’t matter.

Is it good to be your own customer?

Being your own customer comes with pros and cons.

Many startup founders and investors say that it’s a good thing to “scratch your own itch” or “be your own customer”.

By this they mean that if you identify problems that you face yourself, you’ll have a true understanding on how to solve that problem, and thus can build a great solution for it.

A quintessential example of this is Asana, a project management software tool created by Dustin Moskovitz and Justin Rosenstein. While working together at Facebook, they got frustrated with disorganized projects and lack of communication among team members. So they scratched their own itch by building an internal task management tool that they eventually spun out of Facebook into a separate company. The company is now worth close to a billion dollars.

Sure, it worked out swimmingly for Asana. But there are pros and cons to being your own customer.

Pros of being your own customer

There’s proof that a problem and pain point exists

Many startups build solutions and technology in search of a problem, and these are rarely successful. This issue is causing you some kind of pain – lost time, wasted money, or something else – so there’s proof that there’s a real problem there.

You have a deep understanding of the problem

Because you face this problem, you have keen insight into how to solve it. You’ll understand how to approach the solution and what issues to look out for.

Passion for the problem

Naturally (hopefully?), you’re going to be passionate about solving a problem that you face. The solution can have a material impact on alleviating the pain you face often, so it’s likely you’ll work harder to solve it.

Cons of being your own customer

All that sounds well and good. But there are issues that come with scratching your own itch.

You may have this problem, but not enough others do

There’s a certain hierarchy in startups that goes like this: feature < product < business.

You can build a small solution that solves your problem. But maybe it’s just a feature and not robust enough to be a full product.

You can build a full product that some people might use and pay for.

But in order to be a solvent business, you need many users and paying customers.

If you’re your own customer, this problem might be a scourge to you but may not be a big deal to enough other people to become a real business.

You may think you know everything

Because you face the problem, you may think you know everything there is to know about solving it. That is soooo soooo wrong.

This might cause you to build everything you want to build and ignore the input of your users. Or even worse, you might not ask your users for any feedback at all.

What you may end up with is a solution that is perfect for you, and no one else.

Passion might make you blind

It’s great to have passion for what you do. You’ll enjoy your work more, and it can help make you more gritty.

But having too much passion can also blind you.

If you’re so passionate about solving your problem, you might develop tunnel vision and not see when things aren’t working. You might not be able to identify that not enough people have your problem or that you’re solving it in the wrong way. And you may not be able to course-correct before things go down the shitter.

My situation with WinOptix

With WinOptix, I have a sort of hybrid scenario of being my own customer, and not.

I came up with the idea for WinOptix by trying to scratch my own itch.

While working at software development firm Thorn Technologies, we would use Maryland’s database of state and local government projects to look for potential work to bid on. But writing these proposals took a lot of time and effort, and many times we would write them not knowing anything about the customer and having no idea of our chances of winning the bid.

So I came up with the idea of a system that would be able to better predict the probability of winning these types of government contracts so businesses like ours wouldn’t waste time and resources going after projects we had a low probability of winning.

I didn’t have too much experience in government contracting, so I started doing customer development with people in the federal contracting space (a much bigger market than state and local). Their input completely changed the approach I would take to solving the problem and has been a massive influence on the product to this day.

While the initial idea spawned from scratching my own itch, I didn’t know enough about the subject matter to be confident enough to build a solution on my own. So I depend on the input of subject matter experts to inform the product development process.

I think it’s been a pretty good balance so far.

Conclusion

There are many pros to being your own customer, but it can come with some drawbacks as well.

Scratching your own itch is beneficial only if you can properly identify when it becomes a burden, and adapt accordingly.

Are you building something that scratches your own itch? What are the pros and cons that you’ve faced? I’d love to hear from you!

Grit, not talent, is the key to success

I recently listened to the audiobook version of Grit: The Power of Passion and Perseverance by Angela Duckworth. This is a great read for anyone who wants to improve at anything.

The theme of the book is that talent, while important, isn’t the key to success. Rather, hard work, perseverance, and stick-to-itiveness correlates much more highly to achieving goals and success in life.

I think this is so important.

Most of us aren’t blessed with natural, god-given talent in a particular skill, but you can still work hard and improve yourself everyday.

And grit is something that can be learned; it’s not just a characteristic that we’re born with.

grit-word

Case studies of grit

In the book, Duckworth highlights some powerful case studies of grit.

The book talks about how MVP and Super Bowl-winning quarterback Steve Young had a rough time when playing football at BYU. As a freshman, he was the 8th string (8th!) QB on the team and was essentially used as a tackle dummy for the defense. He wanted to quit, but his father told him that he couldn’t come home if he did. So Steve kept practicing his throws and improving his play everyday until he became the QB1. And he wound up setting all-time BYU records.

Then he gets drafted by the San Francisco 49ers and has to be the backup to Joe Montana for a few years. He could have asked for a trade, but instead continued to learn from one of the best in the business. He eventually became the starter for the 49ers and the rest is history.

Another powerful case study was of Francesca Martinez, a British woman with cerebral palsy who became a famous stand-up comedian.

Let that sink in a bit. A comedian with cerebral palsy. A comedian with cerebral palsy!

Dealing with cerebral palsy is extremely difficult. Cracking jokes in front of a drunk and raucous crowd is not an easy task. Imagine having to do both at the same time?

Martinez refused to accept her fate. She took speech lessons for years as a child (with her parents’ unwavering support) and has to perform speech exercises before each performance. She embraces her disability by calling herself “wobbly.” And she has sold out hundreds of shows and won many comedy awards. That’s pretty amazing.

The importance of grit for entrepreneurs and parents

Everyone can take away lessons from this book, but it’s a really important read if you’re an entrepreneur, parent, or both, like me. 

I used to think I was a pretty talented marketer and business person, and I certainly worked hard at every job that I’ve had. But I’ve been completely humbled as a startup founder.

There is so much I don’t know, and everyday I face situations where I have no idea what to do. I already have a couple of failed ventures under my belt and it would be really easy for me to just give up and find a corporate job. And I do think about quitting often. But I believe that if I keep pushing and learning, I’ll build a successful company in due time.

As a parent, I really want to teach my daughter Maya how to be gritty, just like how Steve Young’s and Francesca Martinez’s parents did.

She’s only 3 so it’s a bit early to ask too much of her. But there are times where she just says “I can’t” after failing to complete a task such as opening a container or climbing up on her chair.

So each time she says “I can’t”, my wife and I tell her not to ever say that, and assure her that she can do anything if she puts her mind to it. She has even started telling us not to say “I can’t” when we say it. It’s pretty funny.

Duckworth lays out a great system that she uses with her family to learn how to be more gritty.

First, everyone, including the parents, has to do a hard activity. This can be learning to play an instrument, picking up a new language, improving in a sport, yoga, or anything that requires everyday, deliberate practice.

Next, you can quit your activity, but not until the season is up, your membership runs out, or you come across another natural stopping point.

You also get to pick your hard activity. After all, if you don’t like what you’re doing, you’re not going to stick with it.

And she mentions that when her kids get to high school, they have to commit to the hard activity for at least 2 years.

I can’t wait to implement this when Maya gets a little older.

Conclusion

Even if you don’t have natural talent, you can work hard and learn skills to be successful. I can’t explain enough how powerful that is.

It takes deliberate practice and a gritty mindset to do so. But I believe that it also takes a strong support system and helpful people along the way.

If you’re looking to improve at anything, I highly recommend this book.

Let me know your thoughts about grit and how it has impacted your life. When have you been gritty? How can you improve your stick-to-itiveness? I’d love to hear your thoughts!

Is your business model minimizing financial risk for your customers?

I’ve written in the past about business model innovation, and how companies can not only innovate with their product, but also with the way they charge their customers and garner revenue.

A business model innovation that I like and have been noticing recently is one that that minimizes the financial risk for its customers. While the free trial and freemium models do this to a certain extent, some companies go even further.

There are two models that I highlight in this post:

  1. When companies provide a service first, and get paid later when a certain event occurs
  2. When companies have you pay first but then refund money if you don’t use the product in a given time frame

Here are three companies that do a great job of minimizing financial risk for their customers.

Lambda School

Studies from Georgetown University and Pew Research Center have shown that college graduates make significantly more per year, and over a lifetime, than their counterparts with no four-year college degree. That’s a comforting statistic for college grads, current students, and those thinking about attending.

But there is a lot of risk in attending college.

First of all, the cost of attending college has become astronomical.

Tuition and fees at ranked private schools average over $41,000, with some of the top schools charging over $55,000 per year. Yucky to the bank account.

Growth of college tuition

Growth of college tuition – graph courtesy of US News

So unless you have rich parents who can pay for your education (lucky you), or you ace all of your high school classes and entrance exams and get a full scholarship (smart you), you’re likely going to have to take out student loans. And these loans will follow you around forever, even if you declare bankruptcy.

Second, even if you graduate college, you might not get a job upon graduation, or months or even years after. That’s pretty terrible.

Because of this increased risk of attending college, there’s been a growth in popularity of vocational programs and coding bootcamps like General Assembly, Flatiron School, and many others that have come and gone. These programs can either be in-person or online and teach you tech-related skills like web development and digital marketing. Classes typically last a few months, depending on whether you’re a full- or part-time student.

The problem is that these programs are still pretty expensive (full-time, in-person coding bootcamps can cost up to $20,000) and you’re still not guaranteed a job after you graduate. So are these programs really solving the problem?

Lambda School has a really innovative business model that aims to minimize their students’ risk of gaining a useful education.

Lambda School provides computer science and data science courses taught live and online by instructors who have worked for the largest tech companies like Google and Apple.

The big differentiator is that you don’t pay a cent for this education until you graduate and make more than $50,000 per year in salary. At that point, you pay 17% of your salary for two years. 

So let’s say you graduate from Lambda School and get a job as a Data Scientist making $75,000 per year. 17% of $75,000 is $12,750; assuming you don’t get a raise within your first two years, you would pay $25,500 to Lambda School.

That’s less than one semester’s worth of tuition and fees at some universities.

With no upfront monetary investment.

And you already have a high-paying job before you pay anything.

That’s pretty amazing.

I’m not sure how innovative their curriculum is; live online education has certainly been tried before. It’s the de-risking of the cost of the education that’s really innovative.

I learned about Lambda School from this episode of This Week in Startups.  The founder, Austin Allred, shares a ton of info about why college tuitions have soared and why he started Lambda School.

Education is one of the most important sectors of our economy and it’s clearly broken. I’m rooting hard for Austin and Lambda School to succeed so this huge problem can be fixed.

MaxSalePrice

Selling a home is a stressful task and a lot of work.

You need to make your home look nice, work with agents, price it correctly, give tours, and much more, in a short amount of time.

In the end, you want to maximize the sales price of your home. And one way to do this is to do home improvement projects before you put your house on the market. A remodeling of your kitchen, new hardwood floors, and a fresh coat of paint can significantly increase the value of your home.

These projects aren’t cheap, though. A kitchen remodel can cost over $40,000, a full paint job can cost $10,000, and installing hardwood floors can be many thousands as well.

And you have to find trustworthy contractors and pay them upfront to do this work.

MaxSalePriceMaxSalePrice logo is flipping this model on its head.

The company will work with you and your real estate agent to figure out what improvements are needed to maximize your sale price. Then their contractors will execute these projects, and you don’t pay until you close the sale of your home, regardless of how long it takes to sell it.

Everyone wins here. You maximize your revenue from your home, your agent gets her cut of a bigger pie, and MaxSalePrice gets paid for its work.

I know the company’s CEO, Rick Rudman, pretty well. He started and sold his PR software company Vocus for nearly $500 million and was the CEO of social media software Tracx. The more he told me about MaxSalePrice, the more interesting it sounded. I think it’s a really great business model and I’m sure MaxSalePrice will be really successful with Rick at the helm.

Slack

Workplace communication provider Slack does many things really well, and their business model is one of them.

Slack has a pretty amazing free plan. You get unlimited public and private channels, 10,000 searchable messages, up to 10 apps, and much more. It’s very compelling for small teams.

Slack logoOnce you grow out of that plan, Slack can cost up to $15 per user per month.

The innovative aspect of their business model is what they call “Fair Billing Policy”, where your company will only get billed for the people who use it each month. So if an employee you’ve already paid for becomes inactive, Slack will add a prorated credit to your account for the unused time.

There are very few enterprise apps that get used by every employee every single day. Even though Slack is likely to be one of these apps, they still minimize financial risk for their customers by providing refunds for inactive users.

That’s a characteristic of a truly customer-centric company. It’s no wonder why they’re valued at more than $5 billion.

Conclusion

I really love it when companies innovate with their business models, and these three companies are doing a great job of taking care of their customers’ wallets.

It has really made me think of how to structure pricing for my startup, WinOptix, and how I can de-risk this process for my customers.

Have you seen other companies whose business models help minimize financial risk for their customers? Are you doing so for your customers?

I’d love to hear your thoughts in the comments.

Marketing is the easiest and hardest job at the same time

Marketing word cloud

Marketing is really easy. And it’s hard. Both at the same time. I learn that everyday.

NYU Stern is one of the best universities in the world for finance. And I got my MBA there in marketing (though Stern is pretty good at Marketing, too).

At Stern, the finance majors would constantly poke fun at all of the marketing folks for taking the easy route. While these finance people were using spreadsheets to calculating Betas and IRRs, we marketers were learning about fluffy stuff like “brand” and “engagement.”

And I’ll admit that when I was was an engineer and consultant way back in the day, I thought that marketing was easy and fluffy as well.

On one hand, it’s true. On the other hand, it’s not.

Marketing is easy, anyone can do it

Post something on Twitter? That’s social media marketing.

Write a blog post? That’s content marketing.

Pay another company to slap your logo on their materials? That’s partnership marketing.

Talk to someone about a product? Is that really marketing? Yeah, that’s word-of-mouth marketing.

It’s true, anyone can do marketing.

Executing marketing tactics is easy. In fact, any conversation that you have with anyone about anything is marketing for that thing.

Yeah, marketing is really, really easy.

Anyone can do marketing, but can they do it well?

Yes, anyone can do marketing. The question is whether they can do it well and achieve the goals set by their boss and company.

You can execute any of the tactics that I mentioned above. But how are they working? Are they producing leads, users, customers, and revenue?

Here’s why marketing is so hard.

So many channels

I mentioned four 4 types of marketing channels in the section above. That’s only a fraction of all the marketing channels that are available at our disposal. Here are a few more that I can think of off the top of my head:

  1. Pay-per-click advertising
  2. Online forum marketing
  3. TV advertising
  4. Radio advertising
  5. Affiliate marketing
  6. Mobile marketing
  7. Guerilla marketing
  8. Email marketing
  9. Public relations
  10. Event marketing

Here’s a Google sheet with many, many more.

The difficulty in marketing is experimenting with all of these channels, prioritizing which ones to focus on, and determining which are most effective.

True measurement is difficult

Awesome segue – how do you determine which channels are most effective? You need to be able to attribute leads, customers, and revenue to each channel. That’s proven to be pretty difficult as well.

John Wanamaker famously said that “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

So true.

Yes, online marketing has made that easier. If you run a Google Adwords ad and a user clicks and buys your product, you should be able to attribute that sale pretty easily, right?

But what if that user heard about your product from her friend prior to Googling it? Or what if they saw a tweet from your company last week that made them think about you? Or what if they saw a recommendation of your product on Amazon before hearing about your product from a friend or seeing your tweet that made them think about you?

Is it correct to attribute that sale to that Adwords ad entirely? No, it’s not.

Even though we now have access to so much data, gleaning real insight from all of this data has become increasingly difficult.

So how do you truly understand which channels are working, and which aren’t?

Attention is scarce

There’s so much to do nowadays. No one has time for ads.

Everyone fast forwards through commercials during the shows they DVR. Shit, they don’t even DVR anymore – they’re watching Netflix and Amazon Prime.

Consumers spend tons of time on social media. And while the potential to reach these billions of social media users is huge, these audiences are super fragmented and distracted that it’s so much more difficult to engage and interact with them.

It’s really hard to get attention nowadays, no matter how easy it is to write a tweet or blast out an email.

I’m sure that you’ve concentrated 100% of your attention on reading this amazing blog post, but your phone probably buzzed and pinged you with notifications from text messages, Twitter, Snapchat, email, whatever. Thanks for paying attention, though, I appreciate it!

Trust is being breached

Look at all of the data privacy issues Facebook is dealing with now.

Consumers are sick of ads following them around all over the internet (this is called “retargeting”). Even though retargeting works, it’s super creepy.

Tech companies have access to troves of user data that they leverage to serve us personalized (aka creepy) ads all the time.

And consumers hate this.

You need a unique combination of skills

To be a good marketer, you need a broad set of skills.

You need to be creative to come up with engaging copy, a unique market position, and eye-catching designs. But you can’t just be creative.

You need to be analytical to experiment with different marketing channels and measure how well all of these channels are performing. But you can’t just be analytical.

You need to be strategic to see how all of the different channels and moving parts fit together. But you just can’t be strategic, you need to be able to execute, too.

You need to understand psychology, technology, data, strategy, tactics and operations. You need to understand how sales people, designers, programmers, and customers work and what makes them tick.

It’s difficult to learn all of these skills.

Conclusion

There are so many marketing channels, attention is hard to come by, trust has gone out the window, and competition is continuously increasing.

With marketing, you can’t just circle an answer or highlight a cell in your spreadsheet. There’s no formula that you can follow. You have to experiment, measure, make assumptions, measure again, and experiment some more. It’s a never ending process.

So yes, while executing marketing tactics is easy, doing marketing well and proving that you’re doing it well can be really difficult.

Do you think marketing is easy or hard? I’d love to hear your thoughts in the comments.

It’s amazing how one person can change the dynamic of your team

Starting a few months ago, the lead developer for WinOptix, Dave, had less and less time to work on the project, so I was tasked to find another developer to help out.

On my search I went. I emailed developers in my network, posted on discussion boards, and reached out to LinkedIn contacts.

I found a remote developer (let’s call him Steve, not his real name) who looked pretty solid. He had a good resume; he interned at a high-flying Silicon Valley startup and was the CTO at other lesser-known ones. He contributed to open source projects and maintained a coding blog. He was pretty enthusiastic and friendly.

So we brought Steve on board on a part-time basis to work on some front-end styling and back-end bugs.

Steve took a little while to ramp up. We thought this was OK, since getting up to speed can take some time.

But after a while, we realized that Steve wasn’t the right guy for the job. While his code was acceptable, it was not a smooth experience working with Steve.

Everything took too long. Tasks that should have taken 5 hours took 12.

Steve did not push his code (which means sharing his code changes with us to review and merge with the existing code base) often enough. We asked him many times to push his code changes more often and while he said he would, he didn’t comply. Steve would tell us that he was going to push his code, and wouldn’t do so until 2 days later. And when he did, many times less progress than expected was made.

And there were times where we would go days without hearing from Steve.

The launch of WinOptix was already delayed, and our revised deadline for launch was impending. I was down in the dumps because progress was so slow and there wasn’t much I could do about it. While we knew a change needed to be made, we didn’t have much choice but to continue working with Steve, and we planned to do so only until we launched our v1.

In the mean time, I continued to look for additional developers to ramp up our resources after we launched, since we knew we would likely end our relationship with Steve. That’s when I found another developer, Jon, through a mutual friend. Jon agreed to help out immediately.

And Jon has been nothing short of awesome.

He has cranked out so many tasks and has achieved so much more in two weeks than Steve did in over three months. The difference has been night and day. We’re getting really close to finishing v1 and are gearing up to get WinOptix into the hands of about 15 trial customers.

When you’re a small team, every team member’s value, or their subtraction of value, is amplified.

One bad seed can bring everything to a halt. A strong team member can accelerate things quickly.

This is especially true with developers at a pre-launch tech startup. As a non-technical founder, you are so dependent on developers to help you ship your product.

In a large organization, one bad sailor isn’t going to sink the ship. There are others that may be able to pick up the slack and cover for him.

But in a very early-stage startup, where a team may have 3 or 4 members, each person has an outsized impact, for better or worse.

Right now everyone is working part-time on WinOptix, so we don’t have to go through the full commitment of bringing on a full-time employee. There’s no training we have to do, no insurance or salary paperwork to fill out, nothing like that.

But even in our experience of working with part-time employees, we can feel the impact that a bad and really good team member can have.

I now have a lot more confidence in our ability to execute. We’re cranking and can’t wait to get our v1 out into the wild.

On that note, I’ll be taking a break from blogging weekly (a little preview was when I missed publishing last week). With the launch of WinOptix, things are going to get pretty crazy soon. And I have some travel planned over the next few months as well.

I’ll certainly still blog, but it likely won’t be on a weekly basis.

On that note, see you when I see you!

What if things went right?

Prospect Theory graph

Most people believe losses hurt more than gains help.

When presented with a difficult or speculative decision, many people’s first thoughts would be about what could go wrong.

But what if things went right?

I’ve invested some money into Bitcoin, Ethereum, and other cryptocurrencies and frequently have conversations with others about this. Some of the negative things I hear are:

  • Have fun losing your money!
  • I’d never invest in anything not backed by a real asset
  • Crypto has no intrinsic value – I’ll pass

I’m not saying that you should invest in things you don’t understand. I totally get if crypto is too speculative for many, and I’m prepared to lose the amount I invested; it’s not enough to break my bank if things go to shit.

But what if some cryptocurrencies actually panned out? What if the underlying technology is the future of the internet (which I believe it is), adoption rose over the years, and thus the value of these cryptocurrencies increased in lockstep? A lot of money can be made.

There were so many things that could have stopped Uber or AirBNB from becoming a reality. Local regulations did not allow for ride- or home-sharing. Riders or travelers would certainly think sitting in someone else’s car or sleeping in another person’s home would be sketchy. And who the hell would want someone else in their car or home?

If the founding teams of Uber or AirBNB actually allowed these hurdles to stop them from creating these products, the world would be a very different place right now. We’d still be waving down cabs on the street and staying in overpriced hotel rooms.

But Travis Kalanick, Brian Chesky, and the companies’ investors thought about what could go right, instead of wrong. And these companies have changed the world.

Humans are naturally loss and risk averse, and according to prospect theory, losses have more emotional impact compared to an equivalent amount of winnings.

It’s difficult to go against human nature. It’s natural to think about what could go wrong, especially if you have a lot to lose and people depend on you.

But what if things went right?

What’s your thesis of the best path to success?

There’s a great Twitter thread that I took part in that was started by Josh Felser, investor at Freestyle Capital. Here is Josh’s initial tweet:

Of course, with Twitter being Twitter, there was some vitriol spewed at Josh.

I jumped in, asking about my situation in particular:

 

Everyone is going to have a different opinion on how to best get things done.

Some founders – those with families, lots of debt, and other factors – will have more constraints than others and can’t fully take the leap to work on their venture. Others may choose to be more risk-averse and work on their startups on the side until the time is right to make that jump. And some may go balls-to-the-wall, leave their gigs, and just run as fast as they can to get their startup off the ground. 

There’s no one-size-fits-all approach. We all have our theses. 

Josh has his thesis about those founders who won’t quit their job until they get funding. If you don’t agree, that’s fine. Just find another investor who is more aligned with your approach. I’m sure they’re out there. 

Josh may miss out on some successful investments. And he’ll have to be OK with that.

My wife has been extremely supportive of my startup endeavors, is the breadwinner of the family, and carries the brunt of paying for our expenses. I couldn’t do this without her. 

As much as I would love to work full-time on my startup, I have to contribute to my family’s well-being by bringing in income. The time to go full-time on my startup will come, but now’s not the right time. Josh won’t fund me, and that’s OK.  

There are different paths to success, and everyone will have a different opinion about what that path is. Do what’s best for you.