Bart Gajderowicz delivered a great talk at Machine Intelligence Toronto about how people go through stages in accomplishing a goal [1]. The talk was about homelessness and AI approaches to public policy. I instantly saw a connection to all sorts of tensions that people endure when they set out on a goal. To distill the concept, let’s start off with the idea that people have goals, people have emotions, and that time moves forward. As people make progress towards their goals, their emotions change over time. They start off in a good mood, in a state of uninformed optimism. Then, as negative information overwhelms their ignorance, they enter into a state of informed pessimism. So much negative information builds up[…]
Category: Business
Previously, I argued that you should look at the Q4-2016 VR sales figures closely and then make decisions about whether to jump in. Some figures are in. SuperData Research, a technology research firm, estimated that Oculus had sold 360,000 headsets and HTC 450,000 since their products went on sale in March and June, respectively. Both of those headsets require high-end PCs with powerful processors. The firm estimated that Sony, which began selling a virtual reality headset in October, has sold about 750,000. — NYtimes Jan 8/2017 Those aren’t encouraging install bases. Obligatory Gartner Hype Cycle image: Consolidation is a long ways off. Facebook, has deep pockets and can sustain a long chasm crossing. The legal issues with Zenimax are a distraction. This is[…]
Some work is very clearly product work. It’s work on things where the success and failure is dependent on the users of the thing. Your users pay you. Their satisfaction matters above all else. Optimizing for the satisfaction of end users is a distinct activity. Hypotheses have to be assessed and then tested – because it’s very likely that you’re going to be wrong. There’s technology that has to be set up such that it’s reliable and robust for the intermediate to long run. It’s designed to be effective and persistent, with all of the instrumentation that goes along with that. That might include manual A/B testing, user-focused analytics, and extra special attention on the optimization objective. Clear product work is[…]
A data driven culture isn’t necessarily devoid of creativity or imagination. Just the opposite. They’ll have to be especially patient around brand formation. Brands A brand exists in the mind of a person. It usually costs a lot of money for a brand to be impressed upon the cortex of a person. There are certain economies of scale that kick at scale, but still at a considerable cost. If that feels fuzzy, despair not. The framework below is fantastic: Brand and CAC The optimization objective of a startup is valuation. To maximize valuation, Customer Acquisition Cost has to be minimized. As previously explored, nature doesn’t cooperate to keep CAC low. The point of the brand is to reduce CAC[…]
Assume that you’re a founder of a tech startup. Assume that you’ve achieved product-market-solution fit. You’ve nailed it. Time to scale. Many founders are great at sales. But not all founders are great at marketing. And that’s a bit of a problem because of three letters: CAC. The Customer Acquisition Cost CAC is the ratio between dollars spent on marketing, and new customers acquired. And it is related to valuation in a very important way. Let me explain. Take a look at the chart below. This is an output from a standard model of SaaS market penetration. Market size is 333,333 customers, the product will approach saturation at 51% of that target, with a monthly churn rate of 0.20% held[…]
Consider the chart below: There are two series – the total number of cumulative customers (top curve) and the number of new customers added each month (bottom curve). The top curve is shaped like an ‘s’ and the bottom one is shaped like a bell. Each month that goes by, the rate of new customer acquisitions increases up to a point, and then declines. You can see the impact that the bottom curve has on the top, because adding up all the incremental customers yields a cumulative penetration curve. Pop-literature (Moore, Crossing The Chasm) focused on the bell shape of the new customers added curve. Strictly speaking, it’s not a distribution, but the shape causes a degree of comfort with[…]
Consider the statement: The strategies generated by data driven cultures are likely to produce sustainable competitive advantages. Data Driven Cultures Carl Anderson, 2015 (Data Scientist at Warby Parker) defines a data driven culture: Is continuously testing; Has a continuous improvement mindset; Is involved in predictive modeling and model improvement; Chooses among actions using a suite of weighted variables; Has a culture where decision makers take notice of key findings, trust them, and act upon them; Uses data to help inform and influence strategy. Strategy For the purposes of brevity, I’ll define a strategy as: An artifact; That enunciates choices selected from acknowledged tradeoffs; Which is rooted in a paradigm; That is actionable; With the intent of causing a sustainable competitive advantage in[…]
Into the trough of disillusionment with the hyped technologies! The canary in the coal mine for me, with respect to BitCoin, is this post. Look, nobody has enjoyed more popcorn around BitCoin than I have. From Coinye to Dogecoin, crypto-currencies have delivered the lulz. Do I believe there’s a slope of enlightenment for crypto-currency? Absolutely. Do I believe that’s imminent? Nope. Banks are apex ruminants. The lessons from BitCoin have to be fully digested before something really good comes out of it. Machine learning. Huge potential and the best is yet to come. The first wave around machine learning gave us Netflix and Amazon. And then the bloom came off the rose a bit. And now there’s deep learning and we’re[…]
Let’s start with a story. Daan did a traditional fast follow. He calls it Netherflix. His story was: “It’s like Netflix…for The Netherlands!”. At first, he buys rights on the cheap, pays for digital subtitling, and has a successful kickoff. He gets through to 10% household penetration, or roughly 700,000 subscribers, with an annualized gross revenue of about 60 million Euros. The strength of the Euro lets him raid the Anglosphere and he can stock 10,000 hours of content reliably [1]. He gets through the struggle of getting his stack to deliver content and minimize churn. He’s able to host and deliver 10,000 hours reliably, in spite of supporting video players across 11 different front end platforms, and the costs associated with hosting,[…]
That title, ‘morphing the lean startup’, may be technical jargon. But it is literal. And brief. I have a few thoughts to share about them both. Morphing There’s a very small sliver of research in the Marketing Science on morphing. Two papers, ‘website morphing‘, and its adtech successor, ‘morphing banner advertising‘, stand out as giants. This technology makes snap changes to a digital user experience. The ultimate reason why you’re not hearing more about morphing in adtech is because paid agencies can’t figure out how to scale the creative necessary to drive it. I’m convinced that morphing is the ultimate promise I bought into back in the mid-nineties – the perfect intersection of recsys and experience. It requires an extreme[…]