Archive | March, 2008

Developer trouble….

28 Mar

I was chatting to a friend from America recently about the problems I’ve had over the last couple of years with web developers. I’ve worked with a couple who’ve both let me down really badly and put me back to square one with my web-based startup. Admittedly much of this was my own fault for not being tough enough with them when it seemed like they weren’t committed to the project. And also my lack of capital meant that I had to engage the developers with equity stakes instead of cold, hard cash. The problem with this, as I wrote about in this post, is that developers don’t often see the potential future value of things. So giving them a share of the company didn’t excite them into action in the way I thought it would, and I slowly drifted down their priority list until I wasn’t hearing from them for weeks at a time.

I understand that a freelancer’s gotta eat, and so therefore will have to take other jobs that offer to pay upfront. But if you have been given a substantial stake in a potentially very lucrative business that you would find the time to make it work. Where are all the programmers out there that have developed the sites for the multi-million dollar businesses out there? I don’t believe that all of those were funded by entrepreneurs backed by Silicon Valley funders. Surely some of them must have been started by geeks in their bedrooms with groovy ideas – like these guys who had to quit the UK and head to the States?

So what’s the solution for cash-strapped entrepreneurs like myself?

Sadly i can’t say I can think of many ways other than using shares / equity as “payment”. A good chat to my developer friend Paolo (who’s one of the rare breed of “geeks” who’s also a great creative entrepreneur – check out his spendamillion.com project) has clarified a few possible steps to consider in the future:

  • Networking events to bring geeks and entrepreneurs together – but will the geeks still be as potentially unreliable? Maybe I should organise one…
  • Using sites such as elance and getafreelancer to find cheap labour – quality and reliability an issue?
  • Break the design, wireframing, development etc into smaller chunks so that it’s less daunting for the entrepreneur, plus developers are less likely to go AWOL at any given stage. Especially if you give each stage to a different developer.

Sadly I think the ideal solution is to find a good, well-respected freelancer or small company, pay them for however long you need them for and make it clear that for that fortnight, or whatever, they completely belong to you and you expect twice daily updates. Now, finding a freelancer with the necessary skills and time….. That’s another matter!

I’d be really interested to hear from anynoe who has any thoughts on how best to get quality web work done with as little capital outlay as possible. Any ideas?

The Demise Of Facebook…

14 Mar

Of course Facebook isn’t facing demise. That would be ridiculous. But for the first time since their launch their audience number in the UK has dropped. While they’re still hitting a staggering 8.5m unique visitors a month, this might be the first sign that there might be a saturation of the market. I know I’m certainly finding it difficult to stay on top of everything (4 email addresses, a blog, 2 social networks plus some business networks and a bunch of casual forum memberships). I’ll be deleting my Myspace account shortly (I never use it and find it so clunky in comparison with Facebook) because I just seem to be the target for being a new friend of millions of bands. But despite us reaching this stage there seem to be more and more social networks every day, with platforms such as Ning.com offering everyone the chance to build their very own networks for free.

So, what’s the future? Either people will retreat to ever more specialised networks according to their personal interests, or more sites such as Moli.com will spring up. Moli allows you to manage profiles on various social networking sites from one place. Sounds like a dream for those network addicts. But as far as I’m concerned, I’m looking for a little simplification in my life. Shame I’m a sucker for signing up and trying uot every new site, app, service and technology!

It’s worth noting that despite my moderate predictions of doom and gloom AOL (a branch of the Time Warner juggernaut) has got into the social networking game by spending $850m on Bebo. Not a bad deal for the 3rd biggest social networking site in the US (after Facebook and Myspace), especially when Microsoft would only have got about 10 percent of Facebook for that when they invested in a small 1.6 percent stake last year. But Youtube sits at the top of this tree. It’s latest figures show it as the world’s most popular social media site , with a massive 10.4 million visitors in January alone.

2008 Rank….Website…………Unique audience (m)
1……………YouTube……………..10.4
2……………Wikipedia……………9.6
3……………Facebook…………….8.5
4……………Blogger……………..5.1
5……………MySpace……………..5.0
6……………Bebo………………..4.1
7……………Slide……………….3.4
8……………Yahoo! Answers……….3.3
9……………Windows Live Spaces…..3.1
10…………..TripAdvisor………….2.4

Ticket Touts, Microsoft, China and Digital Nomads

11 Mar

* “Concert promoters have joined performing artists’ managers in their battle to get secondary ticketing companies to pay a levy from the profits they make on live shows”, says an article on FT.com. In essence this means that they want the likes of eBay to pay a percentage of any profits from tickets sold online. Part of me says this is an important way to start to eat into the “problem” of ticket touts buying up normal price tickets before the real fans can get there, and then selling them on at several times the price. Another part of me thinks we can’t mess with market forces. If I sold a car to a man for a price I’d set, and then found out that he’d later sold it on for more money I couldn’t demand a share of his profits too, could I?

* I’ve been keeping half an eye on the swelling giant of a market that exists in China. There’s so much potential for any entrepreneurs who are willing to take a punt on providing for the burgeoning middle classes in this exciting country. I can’t say I’m much of an expert on consumer goods, but if you can leap the cultural hurdle (if you’ll excuse the metaphor) and find a product or service that captures the imagination of the Chinese nouveau riche there’s plenty of exciting opportunities ahead. I for one would love to spend time out there. It’s a vast, intriguing country that is just asking to be explored. My friend Rob has been out there for the past year and I always enjoy checking out his photos.

* You may remember that I wrote about working from my new local cafe recently. Well, a few days ago Microsoft’s Steve Clayton blogged about the very same thing. He links to some great articles on the subject of “Digital Nomads” (hey, I’m a Digital Nomad. I like the sound of that!). Definitely worth a read if you’re the type who does (or could) work from anywhere.

* I mention Steve Clayton because I’ve really enjoyed reading his blogs of late, and he has really “humanised” the Microsoft behemoth for me. They are often seen as the faceless, corporate flipside to Steve Jobs’ “hip and groovy” Apple. But through reading Steve’s blogs I’ve got a sense of the passion with which Microsoft go about their creativity and innovation. I was lucky enough to meet one of his colleagues, Steve Beswick, recently when I sat on the panel of a Dragon’s Den style event for Make Your Mark‘s “Ideas Igloo”. A really cool event, supported by Microsoft, which aimed to identify and encourage young entrepreneurs and innovators. I really enjoyed the event and it reassured me to see that this bunch of young students had some amazing ideas and tons of energy.

1000 True Fans

6 Mar

Just a couple of quick things for you, as I’ve got a backlog of things I’d like to tell you all about but they’re building up and I never have enough time to blog as it is!

Those of you that read my last blog about Chris Anderson may know of his seminal work “The Long Tail” – the business model of supplying niche products, rather than targeting the obvious products that sell in huge amounts* – which, while really just a re-explaining of already-understood concepts within business practice, has described how a lot of people are making money off the back of the internet.

Anyway, I digress. Kevin Kelly‘s latest blog argues that as a musician/artist/whatever that The Long Tail makes life difficult, but that if you’re clever you only need 1000 “true fans” to make a living. It’s a really interesting read for anyone wondering if they’ll be able to survive in the creative industries. It all kind of depends on your definition of a “true fans”, and whether an artist can generate enough “product” to in turn generate enough sales to keep those particular fans spending on you. It’s easy enough to get 1000 “friends” on Myspace, but as a singer-songwriter who’s only just releasing his first album, would you be able to create box-sets, DVDs and online subscriptions? Or would albums, singles and t-shirts be enough. It’s a question that each individual needs to answer themselves, but I think it’s a very important one to ask. Read the article and get thinking. It should give you a much better understanding of what exactly you have to do to live off your passion.

Also, if you’ve ever worked for, or been involved with a major label you should check out this article from FT.com. It starkly lays out how the music industry as we know it is changing (as highlighted in my last entry), and A+R men are under massive pressure to deliver the goods with a fraction of the budget. As I’ve told many of my clients and friends over the last few years – even if you get signed by a major, the chances of being unceremoniously dropped like a hot potato within a year or two are huge. To the label you are a gamble, and until you go platinum your costs will be subsidised by the likes of U2, Coldplay and the like. And until you make up, as in EMI’s case, one of the just 3 percent of artists that generate a profit (yep, only three percent!) then you’ll be a liability and prime for the chop.

So maybe it’s time to work on those 1000 “true fans” yourself and cut out the desire to sign to an unweildy and outdated major…

* This is a gross simplification, but if you know anything about marketing you’ll be able to relate to it as a different aspect of the Pareto Principle. I’ve actually just found a better description from The Long Tail website that reads: “The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of “hits” (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail. As the costs of production and distribution fall, especially online, there is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly-targeted goods and services can be as economically attractive as mainstream fare.”


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Free music forever???

4 Mar

Seth Godin (arch-blogger of the marketing world and author of many genuinely interesting business books, including “The Purple Cow“) has been writing and talking about the music industry recently. And it’s all been very interesting. He gives Bruce Springsteen as a great example of how longevity is something that is so much more difficult to achieve these days, as labels are under massive pressure to drop under-performing acts like hot potatoes.

Secondly, he talks wisely about how the dynamics of the music industry are changing. I’ve long been telling anyone who’ll listen that we need to look at music on the internet (particularly Last.FM, Myspace etc) as if it were radio. Having your music out there to listen to on demand, for free, is a good thing. In the very early days of radio all the live musicians were up in arms. “No one will come to see us play any more if they can hear us in their own living rooms!” they said. But we all know that exactly the opposite happened. And the same will happen now, but this time it’s the major record labels that are doing most of the shouting.

I’m not denying that we’re still in a period of flux. It’s going to take time before everything settles down. But the music industry is not in trouble. It’s just the music industry as we know it that is in trouble. And the problem is that the revenue streams have changed. Whereas there used to be one river of money that flowed past the mill of the record label (if you’ll forgive the metaphor) in order to keep it turning, now we have a thousand tiny streams all flowing in different directions, none of which seem to be sufficiently swollen to keep the mill wheel turning.

And the funny thing is that some of these streams don’t actually have any money in them. We’re entering an era of people making money from free content. Just as many journalists are writing online for free in the hope that they’ll subsequently get paid to do high-profile speeches, or get lucrative editorial contracts with newspapers, so various bands are making their music available for free online in the hope that they’ll build a fanbase that will pay to come see them play live and then buy their t-shirts.

The editor of Wired Magazine has just written a book about “The Future Of Free”. I think it’ll be a must-read for everyone in the music business, whether they’re a PR person or a drummer. The author, Chris Anderson, who previously wrote the revolutionary “The Long Tail“, has published the first chapter of “The Future Of Free” for free (of course!) here. As he points out – virtually everything Google does is free. And according to some valuations they’re worth over $200 billion……

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