Building Buzz

Openness and transparency

buzzlabs — Mon, 07 Sep 2009 01:45:33 +0000

In the past few weeks, we’ve met with a lot of people – restaurants, marketers, other startups, cool and knowledgeable people. We usually do a demo and talk about what we do. People always have lots of questions: what’s your technology? What’s your sales plan? How many customers do you have? Who are you working with? Of course, these are all questions I would ask too. However, I can’t help but wonder why many startups are in “stealth mode.” As soon as we had a working (albeit buggy) product, we solicited feedback from the market. Every iteration we’ve built since then has been based on feedback. But are we too ready to give away our secret sauce? Here are some of my reasons for being open:

Our technology is hard to copy. Since we have it and we’re easy to work with, I hope companies would choose to partner with us rather than become a competitor.
Transparency helps align collaboration. When partners know our goals, they understand where we are coming from. They often reciprocate and become more open as well.
People are willing to help. By being honest about our challenges, others can point us in the right direction, or even solve them for us.
Sets the right expectations. Jason Cohen has a great post about this: “You’re a little company, now act like one.” We’re upfront about being a small team. We can’t promise to have 24hr support, but we can promise we’ll do our very best and not sleep until everyone’s happy.

Organic (growth) is good

buzzlabs — Sun, 30 Aug 2009 07:31:39 +0000

At MyBuzz we’ve been fighting a “slow” fire for the last couple days. Every time our crawl kicks off, our website becomes very slow, because they’re hosted on the same box. Fortunately, since we’re still in beta and don’t have a ton of customers, this wasn’t a big deal and people were understanding. This highlights a big advantage of organic growth – we never have to fight flash fires, so we don’t have to cut corners.

The problem turned out to be a spike in memory usage. We have a Rails site that kicks off a rake crawl process. As our customer base grew, we began to see a steady pattern of failures, because crawls started to overlap and the combined memory usage maxed out our server. There are two ways to fix this:

Throw more hardware at the problem
Re-architect the system

On the surface, option 1 seems attractive. We don’t have to write any code, and a server twice as big costs $50 more a month. Option 2 requires a significant amount of dev time. It ended up taking a couple days. Surely, a couple days is worth more than $50?

Without solving the root of the problem, it’ll come back again as we continue growing – when it’ll matter more, with more customers who’ll expect a non-beta product to be up and running. Knowing that, we took the time and made the crawler run on Amazon’s Elastic Compute Cloud (EC2), which means we’ll be able to scale out infinitely. This comes at a cost savings as well. EC2 costs $0.1 / hour. Because the crawler doesn’t run constantly, we’re paying for about 10 hours a day, which translates to $30 a month. And it’s a more powerful server!

We could have saved the rewrite for a later time. Now that I think about it, we already passed on it once and doubled our memory . So this post isn’t about making good decisions. It’s about having the option to make that decision. Instead of spending time and money on acquiring customers, we’re focused on improving the product and making sure existing customers are super happy. And a good product sells it self (mostly ).

Free food

buzzlabs — Sat, 22 Aug 2009 01:09:23 +0000

Spurred by Andy Liu’s Startup Challenge which supports Future Hope, I’m sharing some thoughts on building MyBuzz. After a couple years building advertising platforms for Microsoft, I decided to strike out on my own. Social media presents an opportunity for businesses to have two-way communication with their customers, instead of hit or miss ads. The problem is businesses don’t know how to tap into this – either they aren’t tech savvy enough, or it takes too much time. We built a solution that finds relevant conversations, and built analytics and summarization on top to extract more intelligence. Some of our customers are restaurants, which is partly where the title of this post comes from

One of the challenges I’m facing is charging for our product. We’ve been successful getting the product into customer’s hands and iterating with feedback. At Microsoft, we scored “wins” by getting our technology into our partner’s hands. Our first priority wasn’t profit & loss, it was building great technology and putting it to use. At MyBuzz, we’ve gotten lots of customers signed up for free trials. From their response and usage we know we have a sticky product that solves a real problem. Our challenge now is correctly pricing it.

I think one problem engineers have is selling ourselves short, because we think “I was able to build it, so it wasn’t impossibly hard.” We also love to see our work being put to use, so we end up giving away products that people would pay good money for. Fortunately, there are some great people out there, many who want to see new entrepreneurs succeed. One lady in particular told us we were way underpriced – though that’s after slashing our prices, getting an additional free month, and convincing us to take gift certificates instead of cash. Software services have insignificant marginal cost. With everything automated, signing up an additional customer costs us little. Free is easy. People love you, and there’s no fear of rejection. Unfortunately, that’s a hard business to run.

I’ve come to realize that revenue and adoption aren’t at odds with each other. Some customers try to get longer trials by offering to give feedback (which they’d give regardless). My response is: the most valuable feedback is you paying for it. Everyone eats the samples at Costco, but what counts is how many buy the product. Other benefits of not being free:

Customers take the product more seriously, and want you to have a better product. This means better quality feedback (with a more demanding tone)
Implies a mature product that’s supported. Not just another startup that might fold tomorrow
Paying for a product is a strong endorsement.
You get paid!!

A week ago I was at a STS pricing talk, and I was joking that we have the “free” part, just need the “mium”. I’d love to hear any thoughts or advice! Interested in our product? Get in touch with us at info@mybuzz.us or read more here. We’re easy to work with