MYBLOG by Ouriel

Execution is the key: tracking competition

Inspired by a great post by David Hornik, i wanted to share a bit about the experience i have talking with entrepreneurs and their way to understand and explain what competition is. Bottom line: most of the time this is the part i am frustrated with when i discover this is not a part of the business that is mastered well enough.

It is clear that your business should never be (only) guided by your competition's moves but by your own vision of the market and the way to answer a specific problem. But mastering your competition environment is a must specially when you try to convince investors: not only to demonstrate why what you do is unique, but also to show that you know perfectly what you are talking about. And honestly this is an easy part where you can showcase your skills (i would recommend not to talk about competition in a specific slide but all along your presentation)

I cannot count the number of meetings where entrerpreneurs mention that they do not have competition (usually not a good news by the way and if so you should explain very well why not). And when they do, often the list is very incomplete or poorly detailed. And this is really surprising to me because i think this is the easiest part of the job. There are so many easy and free ways to seamlessly find who is your competition that i cannot understand this is not done more often. Before i mention a few methods to find them let me first detail what i mean by competition.

• Direct competition: companies/services doing exactly what you do (Gmail vs Yahoo mail)
• Indirect Competition: Companies solving exactly the same issue but with a different approach (buy a book on Amazon vs an audio book on Audible.com)
• Segmented competition: Companies in your space but operating in different geographical, demographic segments or industry vertical (Facebook for consumers vs Linkedin for pros or Google vs Vertical search engines)
• Potential competition: players that are not in your space but could come to it very quickly (ex Youtube coming to live streaming space)
  
• Attention Competition: companies totally different from your environment but that have a service that is capable of capturing your consumers' attention on their product instead of yours (eg blog ad networks and the variety of formats and ad widgets or startpages vs your traditional portal page).
• Finally, Investors' attention competition: Many entrepreneurs do not realize they are competition for VC money against all other projects out there, not just their direct/indirect competition. VCs want to bet on the best opportunities (and diversify their risk), so they will evaluate those by benchmarking risk and rewards regardless of the company's activity. Bear that in mind when you meet investors

So. How to find those bloody competitors? here are a few free tips to do those, that i use myself.

• Google: isn't it obvious? you'd be surprised by the number of entrepreneurs that did not even do that. Think about the core of your business, identify key "keywords" and run a search, you ll be amazed by what you can find...Power tip: use related page at the bottom of a very relevant link
• Delicious: the web filtered by smarter people than you. isn't it great? run a search in what people tag and bookmark, you can find jewels over there
• Blog search: just like google but for blogs. Use technorati, wikio, google blog search...
• Blog comments: wherever you spot a blog post talking about a competitor you spotted just run through the comments. Readers are way more knowledgeable that the blog writers themselves. 10 times out 10 i find useful competition information there. Do a test, you ll see it works
• Ask people: no comment. so obvious i wonder why people do not do it more often. You can use Question and Answers services like Yahoo Answers or just ask people in Real life (yes it works too)
• Comscore/Hitwise/Nielsen: those market research companies are tracking users behaviour on the web but are not free. They do have free resources
  
• Twitter/FriendFeed: yes Twitter, which is for me the best Q&A service ever, Just ask your friends. You need to have enough followers. Same Thing with FriendFeed that has search and agregates the digital lives and infos of people that matter to you.
  

Spotting them is not good enough: you should find out about them, what they do, how they do it, how the service works, how they make money, feedback from users (forums are usefull for that), who are their team and investors, possibly their financials (this one is tough). I find that there are 2 great non conventional ways to know very well your competition:

• attend events they speak at, they usually will tell a lot more than you'd expect about them.
• Meet with them: when i was young and naive i thought you never talked to your competitors. But this is wrong, you should. Very early, if for no better reasons because you guys are building a market together. Nothing replaces the feel of a direct contact.

My final point would be to say that understanding competition is not a one-off task for a VC presentation. It is a dynamic process that should obsessively be part of your on going task. FMCGs like Procter or Reckitt (i worked for 11 years ago) run thorough competitive analysis all the time on a regular basis. Again it should not guide your decisions, but you should feel you know you competition so well you can anticipate their own next move. So integrate as part of your outlook calendar or whatever tool that has your attention. Just to give you example: i have a special tab in netvibes that helps keeping me track of our portfolio's competitors activities and that monitors anything they say or is said on them in blogs using Wikio search RSS feature. I also keep track of anything being said on Twitter on our companies using Summize. I also use Alexa (although it is totally unreliable) and compete that have good widgets to keep track of everything.

Also attribute the responsibility of doing this to more than one person in your company. this should be part of the DNA of the company and everyone should feel responsible for understanding what your competition is doing better or worse than you at any level.

Note: this post is part of a category of post called "execution is the key" where i share my insights and own experience for basic strategic/tactical/operationnal tasks

Technorati Tags: competition, intelligence

Small tip for improving meeting productivity

It is very rare a meeting does not involve the usage of a laptop and a presentation. I have been attending those past two years hundreds of meeting where i am always observing the same thing: we loose a few minutes each times because we need to turn on the laptop and open the right program and launch the appropriate file. Specially if you don't have a mac where turning on a computer is longer. This is critical if you want to optimize the amount of time allocated to your meeting

Here is my simple tip

Before the beginning of the meeting (for example while waiting in the lobby) turn on your laptop, open the right program and file. Put it in stand by. then go to your meeting. Take your laptop out of Stand By mode. this should take a few seconds only

The other benefit of that tip: it will make a good impression!




Technorati Tags: meeting, productivity, laptop

Should an internet startup outsource its marketing activities?

I was speaking last week at a Panel on Internet startups and Branding. One of the underlying assumptions to this panel was the fact that in Israel we are strong in making great technos but not so great at marketing them. I would say this is strongly changing mainly because a new wave of entrepreneurs is getting more and more exposed to consumer ventures and face the challenge to build brands and service that address directly the end user specially in the internet space.

Historically most high tech ventures in Israel have been non end-consumers oriented and more enterprise focused. I remember when i first arrive in Israel four years ago i could count on two hands the number of companies with an international internet consumer brand.

This has now changed a lot. You can find here dozens of new projects addressing directly end users. But those project have to face the difficult phase of attracting users and keeping them. Which requires a strong marketing culture within the company.

One of the attendees defended the idea that the same way you can outsource finance, legal and other stuff you can outsource marketing in order to solve that issue. I answered this was wrong to believe that someone else can do better something that you should do with excellence from day 1.

Finance and Legal are very rarely key competences in the young life of an internet startup. they are important but not key. Therefore it makes sense to outsource them. But if your service is all about seducing, attracting and understanding the user, the marketing is a key competence of the company. Even more: the whole DNA of the company should be imprinted with marketing. From the CEO to the product team. Marketing is not a function or a title: it is the company. Marketing is about having a great product, a great user experience, a good logo and brand identity, a good customer service, a good distribution road map, a good customer acquisition program and even more important a good customer retention program. Marketing is not about sales (which is always mistaken in israel where there is only one word for both). Marketing is not Business Development. Marketing is about how your company interact with your users at all level.

I do not know any successful web service that did not have a great understanding from within when they started. And one of the key symptoms of that is the quality of the execution. If you do not know how to execute well and assimilate fast the feedback around your execution there is low chance you'll make a difference and there is low chance your users will feel it too. This is why it is recommended to get out there with your product early and start to learn on to improve things with your users.

Let's take PR for example: do you need a PR firm from day 1? There are great PR firms out there, but you can start to do the job without at least at the beginning. StyleShake is a company we have invested in: they do not have a PR firm, not even a PR person inside. but the product and the concept is so good that they are naturally covered by the best papers and blogs (BBC, Wired, Financial Times, SpringWise...)..If this goes one they will have to scale it probably with a PR firm. But for now they do very well. You can the attention of bloggers by simply talking to them directly (of course not by sending a Press Release) or by being smart (Twitter for example just put wide screens at SXSW conference last year to get attention of bloggers)

If you think you don't have the necessary skills inside the company for that, then here is my advice: spend all your energy in finding the right key persons and bring them within the company.

Later, with scale, once you have proven you start to find the right pattern for success you will need to outsource some part of it (PR, media buying, SEO, strategy maybe,..). If you have some budget you can afford a consultant that will assist you. But outsourcing rightly is not replacing what you should already know and it requires time and skill.

There are at least 3 good reasons you'll never get a great outcome from a marketing provider if you don't know how do it yourself

• You won't know how to best select your provider
• you won't know how to best brief and pilot your provider
• You won't know how to best evaluate him

Like a great yogurt brand says in its base line: all the goods things start from within

Tripit.com is awesome

From time to time a website stands out of the crowd and provides a blowing user experience.

I really encourage you to try Tripit.com a website that understands your email booking reservations and that organizes the information around your trip. This is the perfect example of a zero friction website where usage does not require registration and registration is totally seamless and comes naturally in the process when you need it.

I have just tried it from the airport where i am boarding with an email reservation i had on ElAl and worked really great. It created an online space with lots of useful information on my trips (pictures, weather,..) and also helps me integrate that in my calendars (outlook or Google) in a click and share it with my friends. Really awesome. I feel i have a virtual assistant for my trips.

there is a clear trend of a new generation of services that are relying on the laziness of people (the lazy web as you call it) to help them do things they don't want/have the time to do. Email is becoming a good vector for that since this is one of the most used web services and tripit fits that category.

A pure example of perfect execution

Technorati Tags: tripit, trip, travel

Congrats to Humanized

I had a few months ago a BIG Crush on ENSO and humanized. Today Mozilla announced they recruited 3 top engineers of their team. Humanized is one of the best company at building outstanding user interfaces(check Songza for example) and they really at understanding that execution is the key.

I am certain that mozilla and its applications like FireFox will improve dramatically soon

Technorati tags: enso, humanized, mozilla

Startups: depending on Google is risky

For unknown reasons (i contacted incredimail to find out more) Google terminated its business relationship with Israeli startup Incredimail.

According to Reuters Adsense was representing a substantial part of the revenues of the company. The impact was immediate and the stock lost nearly 41% in Nasdaq.

I really hope Incredimail can solve that issue. Actually i am sure they will (Microsoft might see here an opportunity)

Google can be a fantastic business partner but if for some reason you loose it it may impact significantly your operations. Not only from a revenue point of view but also from a distribution point of view.

A lot of startups are building their distribution strategy on Google page rank and their ability to be well ranked in search results. This SEM strategy is good and even cheap in the short term but risky if Google changes suddenly its algorithm or decides to takes you off the index. This happened recently with lots of startups and services that were using abusively internal backlinks to increase their page rank.

The real challenge is to become a destination site not staying a Google shadow

Update: Mike at TechCrunch has published a note about this too. He mentions this could have to do with fraud. But nothing is confirmed for now.

Update 2 : i just had a chat with one of the founders of Incredimail which confirmed that as a public company they cannot disclose the reason why this all happened but that this is not related to a fraud issue. Also confirmed that in a few days all will be sorted out (with or withouth google?)

 

Technorati Tags: google israel, incredimail

Execution is the key: 5 Simple ideas to track your competition

One of the key elements for a startup is to know its environment composed among others of competitors (direct or not). It is very hard to get intelligence on what a startup is doing for obvious reasons: the company is young and has very little public track record.

I am asked so often about that question that i decided to disclose some tricks i used (not all of them of course) over the years and that prove successful (i am saving you the obvious stuff like reading their blog, tracking technorati, reading news....)

• Who are your competitor: 7/10 people i met don't know their competition. If you don't know who they are you should and to find that use internet directories like BuzzShout or museum of Modern Betas. This is usually not enough. find blog posts about one of them, usually in comments you'll find way more (check any random post on TechCrunch for example)
• Get Analytics: do not stop at Alexa that is not reliable and even wrong most of the time. Get free alternatives like compete or quantcast. The best data is from Nielsen Comscore or Hitwise. This data is not free. So one tip: track their blogs, they are full of free public data.
• Track job boards: the startup page but also major vertical job boards (check out crunchboard, amazing how much you can learn from it) so you can see if they recruit (usually a good sign) and what kind of skills they need to build their company
• Attend conferences attended by your competitor: usually they will gladly share presentation if they sponsor including details. If you can't go there check out the video podcasts or slide presentation available on the net
• Meet them: this is often the most obvious and less used approach. A competitor is not an enemy and they will probably answer positively to a request for meeting. Of course you won't talk about your respective business plans. But if you have a good intuition you can guess a lot of good stuff out of it.

All those tricks are free and can be used right away. There is a lot more ways to find out very specific infos. I could share them, but then i would have to kill you :)

Do's and Don't for entrepreneurs planning to launch a web startup with no money

Adrian has some good tips and resources for web entrepreneurs who wish to keep a low burn rate before they prove something with their idea

Read his post. This could enter the category execution is the key

Execution is the key #7: the magic funnel

Internet is worse than tv. You can zap faster and for many more reasons. Once you get a user into your new website for the first time, you have to give a pretty good reason to get him use your service and eventually come back. One of the biggest challenge is to manage to convince him/her to try the service with no friction (one of them being the registration process). This is in my view one of the hardest part of the execution and there is no real recipe on how this can be solved since it merely depends on the nature of the service. But the end result should be that the user will get close to immediate understanding and reward by trying your new site.

There are many tactics to remove the friction between the first visit and the actual usage. Here are a few

• Site Tour: a screencast to explain what you'll get
• Demo account: so you do not need to register
• Freemium approach: don't pay now, pay later (animoto, Flickr)
• taste me first: give an inch of your service without registration and provide more services by registering (Youtube)
• No registration at all: all is based on a open cookie based service (like stat service whos.among.us i use on this blog at the bottom right)
• Simulation approach: if you were a user this is what you would get. You enter some information and there you go (Pandora)

All of those tactics could be resumed by what i call the magic funnel, which is a path the user is following and that drives him to not only try the service but also get instant reward and understanding by doing so. I think the best option is to give you an exemple. Lijit

 

Lijit provides a customized search service around your universe: it allows you to aggregate your blog and other online services (bookmarks, photos,..) and will provide a search box that you will be able to embed anywhere you want. In addition you'll get TONES of useful services like search stats, popular search tag (you can see that on my blog on the right)

Lijit has a KILLER magic funnel. The way they drive you in the service is seamless and simple. With very little effort (meaning in that case providing the URL of my blog) i got the service set up with already very useful info and tools. Even better, somehow Lijit managed to identify my blog open from my browser i did not even have to write the URL. Here are examples of instant benefits: Lijit identified from my URL the blogs presents in my Blog Roll on the right and asked if i wanted to include them in my search. Lijit provided me a widget that i could install in one click on my blog. Lijit provided me with the option to add the search to my Firefox search tool.

The user interface in addition is clear, simple, fast and provides a kind of WOW effect, which helps of course.  In a word i have the feeling that Lijit was obsessed with the question "How can i make the first time experience as simple of possible" and tried to resolve every single step from first visit to registration. They use a mix of TasteMeFirst and simulation approach in a progressive way

Finding the magic funnel is a very hard task and is the result of an iterative process based on analytics and optimizing the user experience. you won't get it first. This is normal. but you should focus on it real hard.

PS: another good example of magic funnel can be found at Jiwamusic (althought i hate the design) but there is a zero friction user experience between trying the service and registering (thank to ruby on rails)

Technorati tags: lijit, funnel, user experience, internet, execution, jiwamusic

Execution is the key # 5: optimizing your launch day

I have been following up the launch of hundreds of startup and i see so many mistakes being made again and again when the D day has arrived to open the service to the public (i am not talking about private beta where you can still fine tune important things to a small number of of users). I decided to list some of them here hoping this will help some of you guys

• Create a temporary page: before you launch i strongly recommend you create a temporary page in order to start the teasing and getting some pagerank from Google. example here
• Prepare for scalability: make sure you are ready for the big jump. if your website is cool and users like it, it will grow very fast> notify your hosting provider before and monitor load time closely
• Create an error page: you are going to have down times, whether you want it or not. You should prepare an error landing page which brings some marketing message, rather than a error404 page. Twitter and his cat are now famous for example. 
• Do not launch over a week end: you can open the public version on the week end but wait for a monday or tuesday to actually start promoting your website. First you'll be more available to monitor what happens and interact with user requests.., second you'll cover a wider % of the surfing population
• Make sure you are not spamming: if you send invitations by email to a large group of users make sure you are using a mail system that will not be flagged as spam by mail providers (Emailvision for example). Same thing goes for the invitation system
• Optimize your registration form: read that post on the matter
• Make sure your URL works. yes this is obvious http://www.mystartup.com should work. but so many forget to setup http://mystartup.com used by early adopters or being redirected by some browsers automatically when you write only "mystartup.com" in the URL field
• Prepare BEFORE your blogger/PR campaign: if you want to involve bloggers to cover your launch, DO NOT WAIT the day of the launch. notify them, give them a good reason to write about it. A VERY GOOD one. Give clear instructions on embargos and date of publication. Precise if this is an exclusive or not. Save time to the blogger. Read this complementary post

There are other important stuff to think of, but with your permission i'll keep some of the secret sauce recipe for me :)

Other posts on execution are here