Feb 24

SOD100thReader.pngIt’s a small win today but this blog just landed its 100th reader according to the feedburner stats. I’ve been writing for two years now and you better believe I’m hugely grateful each time that counter increments because it means there’s one more person out there that values the content here enough to spend a minute of their day to continue reading. So thanks for being a reader- I promise to keep the dubs spinnin’ ;-)

One of my goals for ’07 is to get more interaction with readers and foster a dialogue here. I’ve added the ability to subscribe to comments on individual posts via email – that should help facilitate that. If you follow this blog take a minute to chime in and say who you are and what you do.

At the very least you’ll get a free link from a PR7 web site and I’ll have a better picture of who’s reading.

Feb 22

If there’s one concept you learn this month that has the single greatest potential to improve the profitability of your site, the power of DIY multivariate analysis using the Web Optimizer is it. Let me explain.

What is Multivariate analysis and why should you care?

Multivariate analysis in the context of web sites is the science of changing elements on a page and studying the effect they have on your visitors’ behavior. If you have a web site, presumably you already have a goal and your site facilitates a behavior from visitors that contributes towards achieving that goal. There is likely a desired outcome you’re seeking on each visit – an action you want that person on the other side of the wire to take such as filling out a contact form or purchasing a product. This desired outcome is known as a conversion.

Improving your conversion ratio even one percent can lead to massive improvements in sales and profitability. This calculator is a simple way to run some what-if scenarios given your current order size, traffic and sales numbers. The easiest way to understand the benefit of improved conversion is to think about it as “miles per gallon” on a vehicle- think how much gas you would save if you doubled the fuel efficiency of your engine? But it’s even better with web traffic. If your current cost per acquisition for a customer is $5 per customer given all your fixed design/development/hosting costs and marginal costs like advertising, converting twice as many visitors with zero additional cost can bring your cpa down to around a dollar. This has a dramatic effect on profitability of your operation – the effect on profitability is non-linear especially if you feed the savings back into targeted promotion.

How GWO works

So now that you understand the value of improving conversion, let’s talk about how GWO specifically does it. Google Web Optimizer is javascript-based multivariate analysis tool that gives you the ability to test different versions of key pages on your site to determine the winning formula that produces the highest conversion. You set up experiments and GWO will dynamically serve different flavors of the same page randomly to different visitors and record the number of resulting conversions. The empirical data is then presented in a graph like the one below. Provided you have enough traffic to produce significant results, the tool reveals the winning combination along with the confidence level of the suggestion (ie. the statistical significance).

GWOExperimentResultsSM.gif

You can see that Graphic #4 outperformed the others and crushed the original graphic by almost double.

And the winner is…

So this is all nice in theory but let’s take a look at a concrete example of how this helped us refine our messaging on the JumpBox site. A week ago I set up GWO on the JumpBox homepage and tested five different versions of the main graphic. Here’s the five versions I tested:

GWO_layoutE.gif GWO_layoutD.gif GWO_layoutC.gif GWO_layoutB.gif GWO_layoutA.gif

Can you guess which one performed the best?

(scroll down for the answer)

spacer.gif

(keep going…)

spacer.gif(wait for it…)

spacer.gif(waiiiit for it….)

spacer.gif
winningGraphic.jpg

This version converted at a rate of 21.2% – double that of the original which performed at 11.3%. The breakdown for all is as follows:

GWO_layoutE.gif GWO_layoutD.gif GWO_layoutC.gif GWO_layoutB.gif GWO_layoutA.gif
Combo 2
16.1%
Combo 3
11.6%
Combo 1
18.7%
Combo 4
21.2%
Original
11.3%

Personally I thought gradients were unfashionable in ’96 but that just proves that conversion is not necessarily about spectacular design. The designers who create spiffy pages and defend their effectiveness from a design standpoint may be completely missing the boat in terms of the effectiveness of the design in converting traffic. Nobody can argue with real numbers from your own visitors – at that point the winning choice is no longer speculation, there is a right answer as confirmed by empirical data.

Anyways, it should be noted that for the purposes of this experiment I counted a conversion as a click through to the about page to read more about the JumpBox technology. Down the road it will make more sense to count a download of our free trial as the conversion but I did it this way for now to get more data immediately on the effectiveness of the homepage graphic for moving people to that next page. I didn’t utilize the multivariate capabilities of GWO either- i used it more as an A/B split test (actually, A/B/C/D/E split). GWO can juggle permutations of headlines, graphics, text, calls to action, and any other displayable element on the page and intelligently report the winning assembly of items. Another aside, we used StumbleUpon advertising as a fire hose of semi-qualified traffic that we could turn on at will to accelerate testing. This worked very well.

What you do if you are interested in using GWO

The video tutorial from Google nails the setup process so I won’t rehash the steps for how to implement it. GWO is in private beta at the moment but it seems they’ve been letting in groups more frequently lately so sign up here and wait for your number to be called. You’ll know you’re in when you see this additional tab appear in your adwords account:

GWOnewTabinAdwords.gif

My only complaints about the tool so far are related to usability – it’s not quite there yet for non-technical users. You will need access to paste javascript code into your web pages as well as the technical ability to do so. I would love to see GWO use a single block of js that you install once and allows you to run experiments serially without having to strip out the old js and re-paste in the new. Google’s best move going forward with this will be to author plugins for the popular CMS platforms and ecommerce engines to simplify adoption and save people from ever having to futz with javascript at all. Other than those gripes, this is an amazing tool for people with web sites. No more speculative argument about “this design is way better than that one” – now there is a definitive answer to which designs and promotions work best.
Have fun with it.

Feb 14

wrinkleResistantShirts.jpgDear wrinkle-resistant shirt technology – I <3 you. I'm letting go of all my traditional button-down ex's. I've told off my ironing board and thanks to you I can now spend an extra five minutes sleeping in every morning. I have no idea how you do what you do but I'm thankful. A Valentine Haiku just for you: Creases are ugly.

But I despise ironing.

With you… irked no more.

Feb 13
GmailLabelsOpen.png

BAD

Given the interest around applications you use to hide distractions from yourself and reward yourself for spending time productively, here is simple technique you can use that’s already available in gmail:

Create labels and apply filters to non-urgent emails from discussion lists and automated alerts and newsletters. Use the “skip inbox” option to route these communications away from your inbox keeping it reserved for unanticipated communications. Nothing new here – if you use Gmail this is probably how you do it already. The secret: collapse the labels tab so you don’t see these messages pile up while you work.

GmailLabelsOpen.png

GOOD

We are insatiably-curious creatures. We pick at scabs and buy scratch ‘n win lotto tickets because we have to see what’s underneath. But the reverse is also true – out of sight, out of mind.

I was looking for a greasemonkey script for firefox that would cover up the labels section in gmail so I could reduce distraction throughout the day and I discovered that the labels tab is collapsible. Use this technique to put non-urgent communications in their place and handle them on your terms instead of reactively answering non-priority email and getting pulled off course.

Feb 08

kitesurferSunset.jpgFor those unfamiliar with what kite surfing is, it’s a water sport that meshes wake boarding with the art of flying an over-sized kite and using the wind to generate the power that a motorboat would normally provide. Also known as “kite boarding,” this sport is the fastest growing water sport in the world right now. A skilled kite surfer can navigate upwind tacking like a sailboat and launch several stories into the air by timing a jump off of a large wave. I had the opportunity to try kite surfing over the holidays while I was down in mexico and it was an incredible experience.

So what could kite surfing possibly have to do with entrepreneurship? One is a water sport and the other a occupation right? There are three striking parallels that can be drawn that provide insight to both.

Finding your “power band”

In kite surfing you simultaneously manage both the board in the water and the kite in the air. Imagine trying to wake board behind a boat while piloting the boat via remote control. Now add a vertical component to that and realize that your motorboat works more like a sailboat. Oh yeah, and the wind shifts directions and the sea has waves… so there’s quite a few variables to juggle. If we can make the leap of comparing kite surfing to the art of bootstrapping a startup with minimal resources in an environment where:

  1. the wind is always shifting
  2. the terrain of the sea is in constant motion
  3. and there’s other kite surfers in the water to watch out for

how does one maximize effectiveness at generating power and, consequently, forward progress?

windWindow.jpgThere is a useful mental abstraction in kite surfing called the “wind window.” The wind window is an imaginary quarter sphere that extends around you and occupies your peripheral vision as you are standing with your back to the wind looking straight ahead (like a big orange slice downwind from you if you are one of the seeds). This is the space in which your kite will fly when its tethered to you. Now imagine a colored gradient superimposed against this quarter sphere where the red zone is that spot directly downwind and the concentric zones of the sphere that radiate outward from there to the edge of your peripheral vision are gradually cooler colors. Weird I know, but if you’re visualizing it you should have something like the picture on the right.

Now knowing that your kite is essentially a sail at the end of a long rope and that the only way to generate power is by harnessing the wind, where do you think you need to put the kite to produce maximum power? Answer: the red zone or the “power band.” In kite surfing the trick is to fly figure 8’s maximizing the time your kite spends in that power band. Anything you do with your kite outside of the power band has a negligible effect on your forward progress. The only thing that can pull you out of the water is knowing where that critical band is and keeping your kite solidly in it to generate power.

takeawayThe takeaway here is that, much like with a startup, there are a thousand different things you could do at any moment to improve your situation, but with limited resources it’s all about determining where that power band is at all times. Some startups have blown millions optimizing kite skills with their kites around on the periphery while others have succeeded on shoestring budgets with a small, crappy kite and minimal kite mastery but by keeping their kite in the red zone. At least 50% of this game is identifying the power band.

If the wind is wrong, walk around it

Unlike paragliding where you are constantly moving forward through a relatively-stationary body of air, in kite surfing it’s the reverse- you are relatively anchored with the wind flowing past you. This creates an interesting possibility that you don’t have in paragliding which is the ability to manually use control over your position on the ground to change your wind window and affect how your kite flies. They say “don’t fight the wind, learn to work with it” and anyone who has sailed a boat or a windsurfer will relate to this statement. If the wind isn’t doing what you want, you need to figure out which direction you’re trying to go and change the position of your sail and keel to work with the wind. If you’ve ever tried to pull a windsurfer up when positioned wrong, you’ll find you get hopelessly toppled. It’s the same in kite surfing and, from my experience, the same in a startup.

takeawayTakeaway: when you’re still in the shallows you can always stand up and walk your board around your kite to manually re-orient with the wind. In the same way in a startup sometimes it’s necessary to manually reposition your sail given a shift in the market or newfound knowledge about the competitive terrain.

We’ve already gone through several skins with JumpBox. Initially the plan was to build hardware appliances and sell those to consumers, then we shifted focus to producing a toolset for vendors that would enable them to convert their applications to virtual appliances and now we’ve finally settled on an entirely different business of wrapping powerful open source server apps as virtual JumpBoxes and selling these apps ourselves to small/medium businesses. The point is as things have evolved shifts in the competitive and market environment prompted us on multiple occasions to manually re-orient our sail to position ourselves where we felt we could generate the most power. While perceived as erratic, this is actually the fastest way to advance while you’re still in the shallows.

Edging upwind

kitesurferEdgingUpwind1.jpgThe holy grail of a wind sport is to go upwind. Any jokester with a sailboat can raise full sails and go wherever the wind takes him/her. It takes true skill to know how to tack and travel against the wind – but once you can do that you can go anywhere. In the same way, anyone with deep pockets can start a company, throw up the sail and go downwind. Bootstrapping with minimal resources means you have to learn to travel upwind.

In kite surfing once you’ve generated enough power to pull yourself out of the water, the next trick is to pick your line and use the edge of your board to carve against the ocean to go where you want to go. Snow boarders and skiiers will be comfortable with this terminology- the equivalent of the “fall line” on a snow slope is the vector of force generated from your kite and the equivalent of retaining maximum height on a slope is making maximum forward progress into the wind. The key here is to pick a line that is as close to perpendicular to the fall line as possible and to keep the kite in the right spot to maintain that groove. Once you’ve mastered that skill, the ocean is your playground.

What does this mean to you?

Viewing things in this light, my questions to you are:

  1. Where is your power band? What relatively low-resource-consumptive activities could you engage in today that will have a great deal of impact on advancing your forward progress?
  2. Are you fighting the wind? Have micro or macro trends shifted since you first engaged? Is there any type of manual repositioning at this point that would align you better with the wind?
  3. Where is your fall line? Provided you’re out of the gate at this point and not expending energy to pull yourself out of the water, what are the different fall lines available for you to take? Are you edging with your board, keeping the kite in the right spot and finding the groove with minimal burn and maximum forward progress or is there a better line you could follow?
Feb 04

Thank you Spanning Sync!

spanningSync.gif

You’ve finally done what no other app has been able to do until now: keep a Treo, Mac and Google calendar in sync. I’ve had the left half of this equation now for a few months using an app called Missing Sync. Spanning sync just re-opened their public beta this morning and makes the right half of the equation now possible. You need to check out their screencast to understand why this is so huge.

This gives us the capability to overlay our calendars in the office and book events for each other. There has always been the webdav server option which we considered for viewing each other’s calendars but that solution only gives you a one-way export to broadcast iCal to a server. Spanning sync means I can add a meeting via Google, iCal or Treo and it will appear in the other locations. And then I can selectively expose and consume other calendars. They’re bridged silently through the Google Calendar interface but I never have to use the Google interface – I can continue to interact via iCal or my Treo.
SpanningSyncspike.png

This should be good as well for working with external vendors as it lets you expose your calendar at varying degrees with anyone else who has a gmail account. For instance, I can consume a calendar shared with an agent booking engagements on my behalf and have those dates propagate all the way into my Treo. 10min is the shortest interval to sync so unless you’re booking at an insane frequency, there should be little danger of conflicts. This is major as evidenced by the traffic spike that temporarily closed the spanning sync beta this past week. Kudos SpanningSync on wonderful piece of software.

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