About a year ago, I told a friend of mine that I’d like to take the work I’ve done for seller real-time SMS notifications on eBay, and bring it over to Etsy.  Etsy is a marketplace for handmade goods.  I tabled the idea until last month when Etsy announced their next generation API (v2).  I figured it would be a fun project to hack and give me an opportunity to pick up some new skills.  For those that know me well, I’m on a mission to learn new stuff, and my objectives of the project were to:

• get an actual artist to make the art
• layout the the Web app with nothing but <div> tags and CSS
• use more jQuery and less hacky JavaScript
• OAuth using a generic OAuth library (ended up using PHP)
• do it in less than three days

Mission accomplished (sans less hacky JS).  It’s EtsyText, version one and free.  Sell an item on Etsy and you’ll instantly receive a text message on your mobile phone.  There are hundreds of Etsy community members using it, and it’s just fantastic to hear their enthusiasm and feedback in both the discussion forums and convos (internal Etsy member messages).  For the Etsy sellers, this helps them stay informed about their sales immediately, without having to be near their computer.  There are many more EtsyText features to come as Etsy continues to enhance their API offerings.

In 1994, SXSW added Film and Interactive to the festival agenda, dubbed SXSWi.  While there have probably been some pretty notable tech company launches during SXSWi, the most famous would be Twitter back in 2007, who also won a SXSW Web Award that year.  Hulu took home a Web award in 2009.  This year, Gowalla took the mobile Web award over location based networking app leader Foursquare.

At SXSWi this year, the ongoing theme was the battle between market leader Foursquare, and Austin native Gowalla.  As I said earlier, Gowalla won the award; however, they all came out ahead.  They all received thousands of new account registrations, and a whole lot of social media and press coverage.

So, if you’re an iPhone user that is into social media trends, you’ve probably used (or use) Foursquare, Gowalla or Rummble.  For those of you that do not participate, these are apps for your GPS-enabled mobile device that allow you to “check in” wherever you may be, and broadcast to the network exactly where you are, in real-time.  You can also see who is in your vicinity.  To a majority of the world populous, the whole notion sounds pretty silly.  Why in hell’s half acre would you want to let everyone know where you are and when you were there?

We asked ourselves very similar questions when My Space entered our lives.  And with the advent of Twitter and Facebook, we asked ourselves those questions even more.  Apparently, at the heart of it all, we want to connect to other people, and if there are tools out there that allow us to connect without much effort, then by all means, sign us up.  Location-based apps fall right in there, too, appending X/Y coordinates to a verbal yawp and time stamp.  I’ve not heard of it yet, but now that I’m putting it out there, I’m sure the Z axis will soon be a new column in the table.  “You have checked in along with 37 others, and 24 feet above the second highest person!”

One thing I have learned by participating in social networking, and observing the landscape morph and evolve — we can no longer just be skeptical about the purpose (why we do it) or the business model (how they/we will monetize).  There are hundreds of millions (if not billions) of human participants, and they’re all ready and willing to tell you what they’re doing/thinking, where they’re doing it, all in real-time.  By all means, it’s time for you to check in.

Oh, and SXSWi was a wonderful experience.  It’s not just a tech conference, nor is it just a wild party.  It’s both, and more.  The native Austinians are warm and inviting.  Great food was everywhere.  And 6th Street was like Bourbon Street every night, sans stupidity and overdrunkeness.  The conference sessions spilleth over with interesting and useful content.  But, in the spirit of social networking, SXSWi is mostly about connecting with other like and not-like minded people, which is great, because I’ve never been to a tech-theme conference that attracted such a diverse audience in such vast numbers.  I will definitely be back.

Cutting to the chase: you know you’re in business with the wrong person when he wants to move your Internet technology company into peddling automotive spare tire covers.

The tire cover product isn’t even the worst part of the story.  All of this was going down in the middle of the dot-com bubble.  The perfect time to peddle techno-pyrite (fool’s gold), get rolled up into another tech giant, go public, and get Jay-Z rich.  Right?  No.  Lets take a trip into Bizarro World and sell covers for spare tires on the back of sport utility vehicles.  I earned Uranium Medallion Status for my round-trip flights to Business Bizarro World with my old business partners.

What was the attraction?  Money.  Easy money.  No effort required.  Brand licensing through existing business contacts.  Manufacturing all figured out (yes, we’re even talking about having them made here in the US).  Rehashing this story makes me feel, well, stupid.  But back then, it was such a sure-fire opportunity.. I mean, really — everybody wants their favorite major league team covering their spare tire for $75.  And trademark licensing should be a snap.  Wrong, and wrong.

But rewind — how in the heck did I get sold on this gold-plated opportunity?  There was an Internet component — an e-commerce site needed to be programmed to handle the masses of transactions from customers rushing to claim their tire covers.  There had to be an online presence for all of the dealers/resellers to sign up so that they too could be a part of this tire cover revolution.  This opportunity, of course, is in perfect alignment with building micro and vertical search technology or IP-based geo-location technology, right?  Dead wrong.

If anyone, including a trusted business partner, approaches you with a sure-fire idea or opportunity that will not require time and money resources — tell them to drop off the bags of cash and bricks of platinum on your desk, and then get back to work on your core business.

So, back here on Earth, harmful opportunities aren’t nearly as stark as that train wreck described above.  Most of the time, they’re more subtle, such as ideas that would appear (on the surface) to complement or enhance your business objectives.  A new Web analytic tool, SEO campaign, social media strategy, site redesign, public relations initiative, and so on.  One way to identify a harmful opportunity is to listen closely to the person who is making the pitch.  If it’s an unsolicited pitch coming from the outside, you’re likely to be scrutinous.  If it’s coming from inside the company (such as my foray into tire covers), your knee jerk reaction to give it the nod might be an incredible mistake.

Listen closely to them.  Is this a completely new direction or does it complement your core business?  Is it being pitched with life and death consequences?  Is this idea or direction suddenly being referred to as “our bread and butter”?  Does it sound raw and unrefined, possibly catalyzed from a blog article or from a competitor’s feature list?  Does the idea sound neat but not really about your core business?  Has the idea really been fully researched and developed, or is it just a synapse that fired and shot out of their mouth?  If any of those conditions are met, then for the love of Pete, do not say yes.

Notice that I’m not suggesting to shut it down.  Not right away.  If it isn’t part of your core business, it’s probably just going to whither on the vine no matter how many resources you pour into it.  If the idea isn’t fully developed, the person has already wasted company time, and your time.  Defend your resources from these black holes.

Be conscious of how often you’re being asked to divert your resources.  Be conscious of how often you’re actually allowing yourself to be distracted, too.  If the problem is chronic and you’re having to refocus your team over and over, then shut it down.  If it feels like I’m speaking directly to you, then you know exactly what you need to do.

Moral of the story — tire covers sold: zero.

Original photo at http://www.flickr.com/photos/naughtomaton/388242905/

The last part, startup metrics, is the topic that Dave covered in his talk.  He started giving this talk a couple of years ago.. and he calls it: Startup Metrics for Pirates: AARRR!! (Startup Metrics for Product Marketing & Product Management). You can see his SlideShare presentation here.  AARRR is an acronym that stands for:

Acquisition: users come to Web site from various channels
Activation: users enjoy 1st visit and have a “happy” experience
Retention: users come back , visit site multiple times
Referral: users like product enough to refer others
Revenue: users conduct some monetization behavior

I’m not going to regurgitate his entire presentation in this article.  Dave presents a lot of interesting ideas and tools that companies should use, but I’m here to get specific about Measuring What’s in the Middle.  As Dave puts it, that’s the good stuff, referring to what’s in the middle, Activation, Retention and Referral.

Caveman Metrics – Ugh.

If you’re an entrepreneur or have ever been involved in an online marketing campaign, one of the first questions you ask yourself (or get asked) is, How do drive millions of people to our site? That’s acquisition.  There are many ways to obtain traffic, from paid advertising campaigns, promotional offers, getting online press, as well as a host of sinister methods.  Recently, a strong emphasis has been placed on building traffic through social networks, such as Twitter, Facebook and MySpace.  So, lets just imagine you plan on doing all of these above — paid advertising, SEO for organic result boosts on search results, blogging, Twittering, promotional giveaways, the whole nine yards.

What do you do next?  Naturally, you log into Google Analytics, Web Trends, or look at your Webalyzer reports and say, “Wow, look! Last week we had 3,000 visits to our site, and 2,900 were uniques!” You take a look at your subscription/signup stats, and say, “Whoah, dang. In that same period we had only 12 account registrations and 3 inquiries.”

With out-of-the-box Web measurement tools, that’s pretty much what you get.  Search keyword referrals (how people found your site), ad campaign CTR (click-thru rate), visitors/uniques, day/time graphs, and so on.  They look really cool, but what are they really telling you that’s valuable?  This is what I call caveman metrics.  You take a cursory head-count of visitors coming in, and take a look at the bottom line of how many signed up.

Pirate Metrics – Aarrr!

Be very specific about what you’re measuring.  Within the activation, retention and referral categories, define goals for which you can measure conversion (success).  For instance, create a metric for a “happy first visit” — such as spending X time on the site, and performing Y actions.  Another metric could be the measure of sign-ups for a specific feature within the site that you’re trying to push the user to, such as signing up for a free widget, newsletter, etc.  Only with specific goals and measures can you tweak and re-measure with any level of confidence that you’re steering user behavior in the right direction.

Revolving Door or Turn-Style

Depending on how well you tune your internal Web strategy, your site can resemble a revolving door or a turn-style.  A revolving door meaning that people walk into the roating glass cylinder and exit before they even step into your establishment.  Or your Web site can resemble a series of turn-styles where you strategically lead them into actions for which they pass through (and are counted) with the expectation that they’re moving forward and getting some value/benefit out of the experience.

When you visit a Web site (even one that you traverse often), take notice of how this site leads you to actions.  That’s not by accident.  It was designed to lead you there.  When you visit a new site that is a complete turn off, or just doesn’t engage you into action, also take notice.  Those are every day examples of turn-style vs. revolving door experiences.

Conclusion: The Fundamentals Apply

There really is no short cut, no silver bullet.  Tools exist that can help you measure more effectively and efficiently, but these tools do not know your business.. they do not know your goals.  Only you know what those goals are.   The point of this article: go beyond basic metrics (i.e. WebTrends, Google Analyitics, Webalyzer, etc.) because alone, they do not tell you anything about your Web site strategy.  Get specific about the user segments that are visiting your site, and what you want each of these segments to do so that they’re happy, they come back for more, and they refer their peers to your Web site.  Keep tuning your site strategy so that you continually increase those results, and reap the plunder… aarrr!

Of course, I’m not doing Dave’s presentation/content justice.  He speaks at meetups/conferences often, and I highly recommend seeing him because his lessons are easy to digest and immediately applicable.  Here’s a video from a couple years back of Dave McClure giving a turbo presentation.  The content of his presentations today is very similar, which in my opinion, speaks volumes.

I found a total of five design firms that I liked — all small houses, nothing at the caliber of Fry or Organic.  Those with phone numbers available, I called.  No humans answered, so I left messages.  And all five I wrote e-mails to (or filled out their contact forms), explaining my interest in having them do some simple design and UI work for a “small but professional Web-facing application.”  On the technical side, I told them it was “basic HTML/CSS and static graphics work — no RIA (i.e. Flash, Flex, etc.) or heavy AJAX/JavaScripting”.

So, you’re well aware of the macro economic downturn we are experiencing.. right?  Here it is, ripe, juicy, low-hanging fruit for the taking.  And how many of the five hands are grabbing for it?  Zero.  Absolutely not a single e-mail or phone call back.  I was shocked, and really disappointed.   I actually pass by one of these firms a couple days a week, and I see people there, I assume, working.  Maybe someone just dropped the ball inadvertantly, in all five cases, right?

Several days later, I find contact e-mail addresses either by domain name record, or somewhere else on their Web sites (where possible, one only had a Web contact form — no e-mail, no phone number).  At this point, it’s purely for research: How many of these people/companies will respond with anything? Mind you, we received no bounce-backs from dead e-mail addresses.  The second wave of inquiries go out..

Absolutely nothing.  I am, to this day, floored.  I have been tempted to knock on the door of the firm that I called, left a message, and wrote two e-mails to, and speak directly to the first person at the door: Hey, any chance you’d like some business? But, no way.  As much as I would love to help out a local small business, if you can’t even return a phone call or e-mail, just imagine the teeth pulling required to get work done.  A molar for a first draft creative?  A root canal for a delivery on the UI templates?  I think not, especially when I would be the one feeling the pain of the extractions.

The moral (or molar) of the story is this:  He or she who “shows up” wins, because the competition sure isn’t. When an opportunity presents itself,  find out everything about it, and if it fits, own it. But step one is reply to your inquiries, and do it fast.