Category: Management

  • The Fragility of Information

    How stable is the state of information storage on the planet today? How much do you know about the life of your great grandfather? How much of your own past would you remember if you lost all access to your personal data? And how likely is it that all of the world’s information could be lost?

    Information is inherently fragile.”

    In recent past we printed out copies of paper or burned CDs or DVDs to back up information stored online or in computers. But now the trend is to digitize as much information as possible and go ‘paperless’. We make ourselves feel better by creating ‘backups’ and making our systems ‘redundant’, but how stable are these information systems, really?

    If for example, one file was damaged via corruption, every time it was copied thereafter, it would be a copy of the corrupted file. When you went to restore the file from a burned CD, you may find that the tiny ‘pits’ on the CD have decayed and the CD is no longer readable.

    Or when you went to access the information, you found that it was stored on a medium that is no longer accessible (such as a floppy disk, which is only readable from a floppy drive) or a file type that requires a computer program or operating system that no longer exists.

    While the latter type, what I’ve aforementioned as The White Album Problem, can be overcome through a constant and persistent ‘copy, transfer, and upgrade’ cycle, it doesn’t account for the former type which is bad data and certainly doesn’t overcome the Worst Possible Outcome.

    The Worst Possible Outcome

    The Worst Possible Outcome is that we, as a society have digitized all of the world’s information and stored it on electronic information systems that run on electricity. There are no paper copies of any information, but it is all available at our fingertips. Humanity rejoices!

    But then one day a freak solar flare from the sun bathes the earth in electromagnetic radiation, destroying all electronics, and plunging us into total darkness. There are no paper books, no paper maps, and no paper manuals on how to put Humpty Dumpty back together again.

    What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun. Is there a thing of which it is said, “See, this is new”? It has been already in the ages before us. There is no remembrance of former things, nor will there be any remembrance of later things yet to be among those who come after.” -Ecclesiastes 1:9-11

    How many times has near total information loss happened before? Let’s look at some modern examples of information loss. At NASA they forgot how the Saturn V rocket worked and are now trying to figure out how to make it work again:

    “A team of engineers at NASA’s Marshall Spaceflight Centre in Huntsville, Alabama, are now dissecting the old engines to learn their secrets…Testing pieces of a rocket that hasn’t fired in nearly 50 years isn’t easy. They aren’t exactly lying around shops in test condition, they’re in storage units and museums.”

    But the knowledge loss wasn’t limited to the rockets. After the Apollo program was ended, the crawlers used to move the Saturn V rockets were set aside and those who built them moved on to other projects. When the Space Shuttle project was first growing, NASA had to spend large amounts of money putting the crawlers back together, because the technology had practically been lost.

    In the May/June 1973 issue of Saudi Aramco World, Richard W. Bulliet wrote in “Why They Lost The Wheel”, “Eastern society wilfully abandoned the use of the wheel, one of mankind’s greatest inventions,” opting instead to use camels, which were more suited for travel than the horses and chariots used earlier in Egypt and Rome.

    There are other examples of lost technology such as The Antikythera Mechanism, “Discovered in a shipwreck in 1900, this device was built around 150-100 BC with levels of miniaturization and mechanical complexity that weren’t replicated until around 1500 years later. After much speculation, in 2008 scientists determined that it tracked the Metonic calendar, predicted solar eclipses, and calculated the timing of the Ancient Olympic Games.”

    Damascus Steel swords, which were generally made in the Middle East anywhere from 540 A.D. to 1800 A.D., were sharper, more flexible and harder/stronger than other contemporary blades. They were also visually different, having a marbling pattern called “damask,” that hinted at a special technique/alloy. But production gradually stopped over the years, and the highly-guarded technique was lost – no modern smiths or metallurgists have been able to definitively solve the techniques/alloys used in forging those swords.

    John Ochsendorf, the architectural rebel who champions ancient engineers recently wrote that, “Old masonry buildings are stressed very low, and so the fundamental issue is that we had knowledge accumulated over centuries, or even millennia, which with the Industrial Revolution was essentially thrown out and we don’t really build like that anymore. Engineers are taught today in universities that there are really two dominant materials—steel and concrete—and so when they come to an old structure, too often we’re trying to make old structures conform to the theories that we learned for steel and concrete; whereas it’s more useful generally to think of them as problems of stability and geometry, because the stresses in these monuments are very, very low. At root, the fundamental issue is that we’ve lost centuries of knowledge, which has been replaced by other knowledge about how to build in steel and concrete. But today’s knowledge doesn’t necessarily map easily onto those older structures. And if we try to make them conform to our theories, it’s very easy to say that these older structures don’t work. It’s a curious concept for an engineer to come along to a building that’s been standing for 500 years and to say this building is not safe.”

    How does information get lost?

    Information is inherently fragile. There are many ways that it can be lost. From data corruption to fire to war to flooding to electromagnetic pulse to the simple act of forgetting to record the information in the first place. The latter is the most common and most dangerous of them all.

    At NASA (and other large [and small] organizations) there is a ‘group think’, shared-brain mentality where the corporate knowledge of the organization is enough to get by during finite periods of time. Organizations can operate as long as there is not too much turnover or brain drain.

    But what happens when a large portion of the workforce retires at the same time, or a region suffers a local catastrophe, or information is not thought to be needed now, but may be very important later? What happens when the information is never recorded in the first place?

    Have you ever heard the term “Recorded History“? Have you ever wondered why there seems to be a time in history when there is no written record of any events before that time? What could have happened to prevent knowledge transfer?

    It could be false pride that is leading us to believe that we are the only generation of humans to get to this point in technological evolution or it could be that previous generations digitized there information to the point where no historical evidence of them now exists.

    If someone a hundred years from now was tasked with proving you existed, what information would they use to prove that point? Would they rely on government databases? An abandoned Facebook account? What if there were no computers? No Internet access? How then?

    The reason we know even what we know now about Jesus, famous leaders, and former Presidents, is because people wrote this information down on a piece of paper and someone copied it. When computers came along, the information was digitized and copied further, but if we stop copying, the information stops.

    When the Bible was being copied by ancient scholars, there were error correction measures put in place to ensure that verses were copied exactly as intended. What memory correcting mechanisms do we have for modern day digital photographs, documents, and other digital information?

    What are we supposed to do?

    There are two things that have worked in the past:

    1. Copying information to new formats using error correcting mechanisms
    2. Varying the ways in which information is stored across mediums
    3. Languages grown, change, and die out, requiring new translations over time

    Here’s some practical examples using this blog as the example:

    1. WordPress may not last forever so at some point I may have to switch to a new platform and transfer and translate my data to the new format
    2. A catastrophe could take out the servers that host this information or we could lose the ability to read it so it could be printed
    3. If modern, subsequent language morphs from English to some new language, then the blog would need translated over time

    In general, things people care about the most are printed, backed up, copied, and distributed, but sometimes events conspire to erase even the most important information. Information is inherently fragile and we must always be vigilant to keep that which is most dear to our hearts.

  • All I Really Need to Know About Process Management I Learned Washing Dishes

    The first job I ever had was in during high school at a fancy restaurant called Heiskell’s Restaurant and Lounge. I washed dishes 3 nights a week (Thursday, Friday, and Saturday). Although I worked there with several of my friends, it was still one of the worst jobs of my life. For 3 years I traded my precious weekend evenings washing someone else’s good times down the drain, but it’s from this literal pit of despair that I learned all I really needed to know about business process management or BPM.

    Pots and Pans

    When you first show up to work, the prep team is just wrapping up and the wait staff have yet to arrive, but the pots and pans have already piled up. There’s a mound of crusted cheese and baked on food to work through before your first dish hits the Hobart. This is where you learn the first business process management task, Design. Before the night heats up, focus on the “work flow, the forces that act on it, interruptions, deadlines, procedures, service level agreements, and inputs and outputs.”

    “Good design reduces the number of problems,” for the rest of the night. “Whether or not existing processes are considered, the aim of this step is to ensure that a correct and efficient theoretical design is prepared.” The flow you develop washing the pots and pans, getting a feel for the water hose, dealing with interruptions from the chef, and preparing for deadlines (“We need more cups!”) will help you meet the service level agreements you and your business have made with the customer.

    Inputs and Outputs

    After the first orders come in, it’s only a matter of time before the dishes start to come back. First comes the bread and salad plates, then comes the dinner plates, followed by the cups. Wait staff will bring huge trays of dishes all at once and often times there will be several people trying to drop off a tray full of dirty dishes at once. This is where Modeling is learned. “Modeling takes the theoretical design and introduces combinations of variables to determine how the process might operate differently.”

    “What if the wait staff staggered their trips in and out of the kitchen? How would that affect the time spent dropping off dishes?” or “What if I anticipated the next tray of dishes by stacking dirty dishes to make room for more trays from the wait staff?” We call this process the Staffing Model or Utilization Model, depending on its use. “A Staffing Model is more of a predicting tool for management, whereas a Utilization Model is more of a reporting tool after-the-fact, but both are effective BPM tools.”

    Forks, Knives, and Spoons

    While plates stack nicely in a tray, silverware lay loose in a tray and need sorted after they come out of the washing machine. As a result of this process, silverware is saved up and ran only when the tray is full (or when we need more silverware washed to meet demand). This creates a “packet size problem”  that exists in everything from Internet traffic to Items Processing runs. In business process management, we call the study of figuring out the best way to do something, Optimization.

    “Process optimization includes retrieving process performance information from modeling or monitoring phase; identifying the potential or actual bottlenecks and the potential opportunities for cost savings or other improvements; and then, applying those enhancements in the design of the process.” Based on those inputs, “Recommendations will be made that overall creates greater business value.” Over time a dishwasher learns the optimal number of silverware per tray.

    We Need More Cups

    Cups, like silverware, run in batches, but there is a finite amount of cups that can be loaded per tray. This is where Monitoring comes into play. “Monitoring encompasses the tracking of individual processes, so that information on their state can be easily seen, and statistics on the performance of one or more processes can be provided. An example of the tracking is being able to determine the state of a customer order so that problems in its operation can be identified and corrected.”

    “The degree of monitoring depends on what information the business wants to evaluate and analyze and how business wants it to be monitored, in real-time, near real-time or ad-hoc. Here, business activity monitoring (BAM) extends and expands the monitoring tools in generally provided by BPM. Time studies can also depend on whether or not the business consultant is recording times as they are or as they should be,” which every dishwasher who’s ran a Hobart knows well.

    Kitchens are for Closers

    In the end, it’s all about Execution. “In practice BPM analysts rarely execute all the steps of the process accurately or completely. Another approach is to use a combination of hardware and human intervention, but this approach is more complex.” It doesn’t matter how good your procedure is, sometimes the silverware tray tips over in the bottom of the Hobart or the garbage disposal gets clogged. No matter what, you’re going to have to stick your hand down in a deep, disgusting, wet hole.

    “As a response to these problems, BPM processes have been developed that enables the full business process (as developed in the process design activity) to be defined in a way to improve business operations. Compared to either of the previous approaches, directly executing a process definition can be more straightforward and therefore easier to improve. However, automating a process definition requires flexible and comprehensive infrastructure,” which is something a dishwasher knows well.

  • Business Plans – Are They Worth It?

    I’m not a big fan of business plans, but apparently that’s not always been the case. In my Google Drive there is a folder called “Business Plans”. Inquisitively I clicked on the folder to see what it contained.

    Business Plans

    My last modification was on April 10, 2008 (6 years ago). None of the five businesses listed are still in existence and only two of them ever made money. I thought it’d be fun to open them up to see what I wrote.

    Able Trainers

    The idea was to create courses on basic computers, the Internet, and Microsoft Office applications. Our target market was “small businesses and suburban schools.” Phonebooks. Business cards. Paper flyers.

    Comp LubeComp Lube

    This business plan contains a logo and the words, “Sustainable computer repair.” I’m not sure what that means. I ended up giving the rights to this company to a former employee, who never used those rights.

    Telablue

    This plan is 9 pages long, 2,250 words. The objective was, “User-friendly, professional, sites with personality based on customer needs and desires. Generate Profit. Grow at a challenging and manageable rate.”

    Turn FilmTurn Film

    Like Comp Lube, this plan is nothing more than a logo and the words, “Film editing and conversions.” At least it actually described what it did. The idea was a “VHS to DVD” service, which dates it pretty well.

    Watershawl

    Watershawl was a “new media company specializing in computer services and design.” That’s pretty much true to what it was. I did a lot of web design and IT work, but what I loved doing was process management.

    Are Business Plans Useful?

    Planning is useful, but I’m not so sure the actual document is useful. It can be used as a way to flesh out ideas, but it doesn’t have to be a long document. One page should be enough to state what you’re doing, how you’ll make money, and who your target audience is.

    A business plan is usually all made up numbers, but it’s easy to feel like you’re building your business by writing a business plan instead of actually trying to Sell First. Customer development is one way to figure out whether or not someone will buy what you are selling.

    I’ve spent the last year and a half helping one of my customers develop a business plan while another customer has already sold tens of thousands of products. Not all companies can be bootstrapped I realize, but the sooner you can validate your idea, the better.

  • Social Media Dashboards

    Are you still using a spreadsheet to collect your social media data? Me too. Here is how I’m trying to automate marketing analytics.

    Every morning I manually calculate metrics like the number of Shopify orders, the number of Facebook likes, and the number of Twitter followers (to name a few). I started to wonder, “How can I view all of my social media stats in one place automatically?” I wondered if there was a program or web site that would provide me the information I was looking for automatically, something like a “social media dashboard”?

    Sprout Social

    Sprout Social

    After hearing a lot of business marketing podcast guests talk about Sprout Social, I decided to check it out. It boasts, “Unlimited reporting & exporting across all of your accounts. Profile, group and roll-up reports for high or low level performance data,” in short, “Integrated analytics across all of your social properties.” While Sprout Social has the social media dashboard functionality I was looking for, at plans that start at $39 a month, I wondered if I could get that functionality elsewhere? Enter Ducksboard and Geckoboard.

    Ducksboard Dashboard

    Ducksboard

    Ducksboards are “Real time Dashboards” to “Visually monitor all your metrics at a glance.” I tested it out by loading in Google Analytics for one site, a Facebook Page, my Trello account, and my Twitter account data. The process was relatively easy and while the displayed data was slightly different than the data I was manually collecting, it did a good job of showing me a real-time “snapshot” view of what was going on. One neat feature of Duckboard dashboards is their “TV mode” feature where the data is meant to be displayed on a flat panel in your office or waiting room. Starting at $16 a month, if all you want is social dashboarding, it’s a nice alternative to Sprout Social.

    geckoboard

    Geckoboard

    Geckoboard is “Your Key Data, In One Place. Stop spending time checking services and start monitoring your business in real-time.” After using Ducksboard, Geckoboard seemed much more granular. It asked many more questions when setting up a “widget” than Ducksboard did. If you want to be more specific, use Geckoboard. Similarly, Geckoboard lets you control how big each widget is displayed, whereas Ducksboard did not. So if you’re anal retentive, use Geckoboard. As far as the dashboard view, I found Geckoboard less appealing and one of the widgets just didn’t work. Pricing is very similar to Ducksboard: it starts at $17 a month, making it a another dashboard alternative to Sprout Social.

    Summary

    One thing both Ducksboard and Geckoboard have in common is a public link to your dashboard so that you can share the information with someone without an account. This makes it easy to share with say, a client. I manage a lot of different client’s marketing campaigns as well as my own sites, so a single dashboard view wouldn’t necessarily work for me, but setting one up for each client might work. It could be a nice upsell that could potentially benefit the client, but like all information, the data is only as good as what you do with it. If you’re looking for a more detailed review, GetApp has a nice Geckoboard vs. Ducksboard review page.

    Update

    I just got an email from Matt at Geckoboard that shows how they can be used on a TV just like Duckboard:

    Hey Erich,

    It’s great to see that you’ve been adding some widgets to your Geckoboard. Now if you haven’t done so already, you should really think about getting your dashboard displayed on a big screen TV for all to see.

    2 in 3 of our customers do this and they tell us that having Geckoboard up on their wall has meant that everyone has access to this important data. It also starts conversations about data – what they’re seeing and why that might be!

    The screen is best placed where people regularly come together (we have one of our own above the water machine) and just focus on the metrics that really matter – you don’t need to display everything.

    Since you’re just starting out, you might want to get creative and add in a few fun widgets – this encourages more people to stop and look at it and as they say, nothing draws a crowd like a crowd. If you’re stuck for how get your dashboard on to a screen, then consider the following options that we blogged about recently.

    As ever, if you have any problems or questions then let me know.

    Thanks,

    Matt at Geckoboard

  • The Trading Turtle Experiment

    Richard Dennis and William Eckhardt are not names you will immediately recognize. But if you are interested in becoming a successful Forex trader, it is worth reading up on them as it might change your life.

    In the early 1980’s, the two commodity traders had turned $5000 into $100million. Of course, they were ecstatic and often discussed the reason for their success. Eckhart believed that it required a special ‘gift’ or trading instinct that had resulted in the profitable trades. Richard, on the other hand, firmly insisted that had nothing to do with an inherent nature but that he had taught himself how to trade by using specific moves that resulted in the right choices of when to enter or exit the market and at what price to make the move. He concluded that anyone could be taught to trade.

    He decided to run an experiment. He placed an ad in The Wall Street Journal and thousands applied to learn trading at his feet. He chose a group of people of 14 applicants each with different backgrounds, ages and financial knowhow and over a period of 14 days he taught them all about Forex. He called them the ‘Trading Turtles’  after recalling turtle farms he had visited in Singapore and deciding that he could grow traders as quickly and efficiently as farm-grown turtles.

    Among the most important concepts he taught them was how to implement a trend-following strategy. The idea is that the “trend is your friend”, so you should buy futures breaking out to the upside of trading ranges and sell short downside breakouts. In practice, this means, for example, buying new four-week highs as an entry signal.

    At the end of the two weeks, he opened an account for each member of the group and deposited $250,000 in each account.  As a group, the Turtles personally trained by Dennis earned more than $175 million in only five years. Richard Dennis had proved beyond a doubt that beginners can learn to trade successfully.

    The idea that anyone can be taught to trade Forex continues today. There are many online tutorials available today, that provide the trader with information that will guide him into successful trading. There aren’t many millionaires out there that are willing to foot the original deposit, but with the proper instruction, making money in Forex is still possible.

  • Joss Whedon and Getting Things Done

    This is a Google+ Hangout with Jason Cobb about a Fast Company article about how Joss Whedon gets stuff done. This intrigued me because I’m a David Allen/GTD follower and I used to make movies (not like these movies). This movie talks a little about that and how life’s journey has a way of taking you were you were going to go anyway, even if you take another path to get there.

  • 6 Ways to Save Your Business

    The American Conservative recently wrote an article about 10 Ways to Save Barnes & Noble, which caught my eye for a couple of reasons. For one, I’ve not only made a lot of money from supporting the Nook ereader both online at Nook Share and offline with Geek Hand, but I also made money from buying and selling books from Barnes & Noble. Second, as a business consultant, I have my own ideas about how Barne’s & Noble could adapt to the new environment they find themselves in. One idea I had that was not mentioned in the article involves Barnes & Noble creating a nationwide coworking facility that promotes the idea of entrepreneurs using their facility as office space. To bring this idea full circle, the original idea behind Nook Share was to build a coworking facility with that name, but after Barne’s and Noble, Inc. registered “Nook” as a trademark on June 4, 2009, the site pivoted to sell Nook covers and accessories. But this article isn’t about me or even about Barnes & Noble – it’s about you and your business. Gracy Howard, the author of the “10 Ways to Save Barnes & Noble” article, summarizes her thoughts in a way that I felt was beneficial to more than just Barnes & Noble:

    Maximize your strengths: build a comfortable, nostalgic ethos. Try making your stores more personalized and local—perhaps build a community library vibe with fun events. Hire people who actually read books, and who love talking about them.

    1. Maximize your Strengths – In the book, Now, Discover Your Strengths, authors Marcus Buckingham and Donald O. Clifton argue that instead of trying to repair our weaknesses, we should focus on improving our strengths. Unfortunately, not everyone knows what their strengths are so there is a Strengths Finder test to help you (or your business) with this. In 2009 I wrote about how to identify strengths and revenue streams, which has a mini-test of 10 questions that will help you find your strengths.
    2. Build a Comfortable, Nostalgic ethos – “Ethos” is a synonym of “character” and envokes, “the characteristic spirit of a culture, era, or community as seen in its beliefs and aspirations.” “Comfortable” is just another word for “familiar” – and since “consistency” breeds familiarity, one way to be more comfortable to customers is to be more consistent. Consistency is one of the 3 C’s of creating trust, which is the third leg in the buying cycle of “know, like, trust.” So the advice here is to have a consistent character to your company.
    3. Make your Business More Personalized – Personalization is changing the world and it’s one of the easiest ways to add margins to your bottom line and differentiate from the competition. When you can personalize a product, you make competition irrelevant. Even Nike and Lands End are getting in on this trend with “mass customization“, but there are other ways to personalize your business such as by remembering your customer’s name, asking them how they are doing, or just saying hello.
    4. Make your Business More Local – There are certainly SEO benefits to making your business more local, but the advice here is to tap into the advantages that a local, brick-and-mortar store has over a online presence. While Amazon has local distribution centers and Local Deals, they do not have local events. You cannot go have coffee at Amazon and you cannot use their bathroom.
    5. Host more Events – “Events” are one of the most underused, but most powerful ways to market your business. From hosting a local meetup to posting a party on Eventbrite, there is power in meeting people face-to-face as it builds the word-of-mouth marketing that is so powerful. On the flip side, going to conferences and trade shows is another great way to get in front of potential customers or to make relationships with other mutually-beneficial companies.
    6. Hire Good People – In the article they suggest hiring people who actually read books. What a novel idea. I have seen first hand how changes in the hiring process affects the overall success or failure of your business. It is a core part of everything you do. Almost every person in your organization has the ability to improve or decline your business so getting the right people on the bus is very important – and quite possibly the most important. It’s one that should be done before any process, technology, or marketing changes are done. Yes, it’s that important.

    Is your business on the brink of collapse? Focus on your strengths. Examine your people, processes, technology, and marketing. Create a list of next action steps and do one of them. As Terry Lin likes to say:

    One is better than none.

  • Dental Office Management Case Study

    How I helped an Indianapolis dental office through 100% turnover and go from their worst month ever to their best month ever in 2012.

    When I worked as a business analyst at First Merchants I would often be doing staffing models during the day and working on web sites and IT work at night. After I was went full-time as a business consultant I offered staffing model services to one of my web clients. They trusted me because I had already got them to be #1 on Google for the term “Indianapolis Dentist” and their site was listed as one of the best dental websites.

    Systems in Place

    Systems in Place

    The business owner wasn’t as interested in tracking what each individual staff member was doing as much as finding out what each staff member does, ensuring it’s documented, and making sure there were “systems in place”. At that point he had recently converted his practice management software from Practiceworks to Dentrix and two staff members had already quit. There was real fear of losing all “tribal knowledge” of how his business was ran.

    Observations

    One of the first things I do when I start a staffing model is to simply observe what is going on in the office. For the first two weeks I would ask questions, watch processes, and document as much as I could. If there was a name for a process I would use that – otherwise I would create a new name for it. I started identifying positions and roles (they can be different) and then placing the newly quantified tasks into ‘piles’ under each type.

    Documentation

    To document the process I setup the office with Google Apps and used the Google Sites portion of it to create an Intranet for the company. Each staff member was given their own company email address which they could use to login to the site as well as share calendars, documents, and email each other. Distribution groups were setup for different team members including the front office, clinical team, and the “everyone” group.

    Employee Turnover

    After a short while, a clear picture began to emerge. There weren’t just issues with cr0ss-training, there were issues with the staff themselves. It wasn’t long before there was more staff turnover. It was like they were “jumping ship”. The decision was made to get some new leadership into the organization so the long-time manager was fired in June. I became the interim manager and began to re-build the new staff.

    Changes in Hiring Practices

    One of the first things I focused on was “getting the right people on the bus”. We sought after and hired people who cared about people first and had a great personality. We had learned that those are two things that can’t be taught so those were the most important things we sought after. We didn’t settle for a person just because they filled the position and at some times were working with a crew of as small as 3 people while we continued to look.

    Changes in Processes

    Once we had the right people in place we began working on the proper processes. We started using checklists to ensure the critical morning and nightly procedures were completed. There were many times when they were not and the staff did not like using the checklists at first, but over time they learned to first appreciate them and then not need them as it became second-nature. This helped a brand new staff have consistency and learn faster.

    Changes in Technology

    While the old staff did not understand technology innately, the new staff embraced it. They began using email to communicate, began referencing the Intranet for critical information (the previous staff kept an old Rolodex on the front desk that contained all of the information they’d ever reference – this was typed up into one page on the Intranet affectionately titled, “Rolodex”). And a new wireless camera system was setup to take patient photos.

    Changes in Marketing

    We signed up for Demandforce and Angies List. We began using Google Adwords and revamped the website. We added more social proof, more testimonials, more web pages, and more blog posts. We added more social networks, posted more often, and were more engaged with our patients online. As a result, referrals from the Internet went up along with web site visitors. We used Google Analytics to track the progress.

    The Result

    By first focusing on the staff, then the process, then the technology, and finally the marketing – we had the right people who were given the right instructions for the best technology, which was supported by the best marketing techniques. The result was an initial boost of 116% the first month, followed by an average increase of 72% for the next five months compared to the five months prior. How can I help you get similar results?

  • What Happened to the Color App?

    Why Did Instagram Succeed When the Color App Failed?

    We hope you’ve enjoyed sharing your stories via real-time video. Regretfully, the [Color] app will no longer be available after 12/31/2012.

    That was the message posted on Color.com [Update 7/15/2003: The site is no longer up.], the domain Color Labs paid $350,000 to acquire in 2011 almost a year after Instagram was founded. A year later their photo sharing app would be on the way out while Instagram was getting bought for a billion dollars. What went wrong? Why did Instagram succeed when Color failed?

    Color vs. Instagram

    What Happened to the Color AppColor Labs was a start-up based in Palo Alto, California whose main product was a social application for photos called Color. It allowed people to take and view photos matched to a location. Color grouped photos based on a user’s friends so that they are more likely to see those pictures that are most relevant. Like Color, Instagram is an online photo-sharing and social networking service that enables its users to take pictures and optionally tie them to a location. Unlike Color, users can apply digital filters to photos and share them on a variety of social networking services. It confines photos to a square shape, similar to Polaroid images, which along with the filters gave photos a retro look and feel.

    A Difference in Startup Methodologies

    Color Labs started after co-founders Bill Nguyen and Peter Pham received $41 million in funding between 2010 and 2011 from Sequoia Capital, Bain Capital, and Silicon Valley Bank before the app had a single user. Conversely, Instagram was started by Kevin Systrom and Mike Krieger in October 2010 with $500,000 and teams of just a few people. As Instagram introduced successful products and attracted users, they slowly raised more money and hired engineers. Meanwhile, Color Labs spent $350,000 to buy the domain color.com (and an additional $75,000 to buy colour.com), rents an office in downtown Palo Alto, California, where it employs 38 people to work in, according to the New York Times, “a space with room for 160, amid beanbag chairs, tents for napping and a hand-built half-pipe skateboard ramp.”

    Instagram’s $500,000 seed funding round came on March 5, 2010 from Baseline Ventures and Andreessen Horowitz while Systrom was still working on Burbn. By February 2, 2011, it was announced that Instagram raised $7 million in Series A funding from a variety of investors, including Benchmark Capital, Jack Dorsey, Chris Sacca (through Capital fund), and Adam D’Angelo. The deal valued Instagram at around $25 million and later that month, Facebook made an offer to purchase Instagram and its 13 employees for approximately $1 billion in cash and stock. By May of 2012, the number of photos has exceeded one billion. Google offered to buy Color for $200 million in July of 2011, but Color Labs turned down the deal. They were later acquired by Apple (mostly for their patents and talent) in October 2012 for an undisclosed sum.

    A Difference in Responses to the App

    On March 24, 2011, Color Labs launched its first application “Color for Facebook” in Apple’s App Store and within a week released an update allowing users to see photos from events “Nearby”, a “Feed” of relevant photos, and a “History” of groups that users can participate in. In June 2011, less than three months after the company officially launched, Peter Pham left Color. When it first launched, the application had around 1 million downloads, but as of September 2011, the service had a little under 100,000 active users. The app was poorly recieved, attracting few users and many who did not understand what it was supposed to do. One reviewer in the Apple App Store wrote, “It would be pointless even if I managed to understand how it works.” Users were confused with the application’s user interface and purpose. Its initial rating in the App Store was 2 out of 5 stars.

    For Instagram, the response was much different. It rapidly gained popularity, with over 100 million registered users as of January 2013. Support was originally available for only the iPhone, iPad, and iPod Touch, but on April 3, 2012, support was added for Android phones. Instagram for Android was released[18] and it was downloaded more than one million times in less than one day. An app rating under 3.5 stars makes users considerably more reluctant to download the app. With an app rating of 2 out of 5 stars, the Color app was doomed. Once entered into the cycle of bad reviews it was nearly impossible to break out as there were wasn’t enough new downloads or positive press to bring the average back up and over the 3.5 stars mark. Meanwhile, as of this writing, Instagram has 4.5 stars ouf of 4 on the Apple App Store with over 62,000 reviews.

    A Difference in Purpose

    Color was first meant to help you find and share pictures related to your location, but Instagram was solving a different problem. They were making mobile camera photos look better. The Color app only worked if other people were using it (a chicken and egg problem), while Instagram solved a problem people had right away. This could have been because Kevin Systrom had already developed a check-in app called Burbn. Josh Williams of competitor check-in app, Gowalla, said, “Early user feedback, coupled with a desire to avoid the check-in battle…led them to drop everything to focus on one simple feature: photos. They made the act of taking and sharing photos (many of which just happened to be location-tagged) fast, simple, and fun.”

    In Summary

    Color was a company in search of a product. They didn’t have much more than a mountain of cash when they started, but it was spent on things like numerous employees, fancy offices, and marketing rather than product development, user feedback, and customer interviews. Color may become a PR lesson for the future as they may become legends for squandering one of the biggest and most covered product launches in app history. On the flip side, Instagram already had a product they were trying out, were listening to their users, and created a new company based on the results. They continued to listen to their users and made their product even better. They didn’t hire a bunch of people or spend a lot of time talking about their company. Their product solved a problem, people liked it, and they used it. Each company had a runaway effect, albeit in different directions. Once those directions were set in motion, it was hard to change them.

    In closing, I’d like to quote from Color’s about page, which says a lot about how the company thought. If you have a different opinion about why Color app failed and Instagram succeeded, please let me and other readers know in the comments.

    At Color, we believe in the opportunity that the new mobile era presents and are excited about developing products that transform the way people share the stories of their lives. We work collaboratively, iterate often, and enjoy problem solving. Color is a company of entrepreneurs and innovators, highly skilled in their respective specialties, constantly striving to learn and grow. We’ve cultivated a very relaxed and informal culture and enjoy our extra curricular activities, which include but are not limited to: ping pong tournaments, ball pit acrobatics and impromptu poker nights.

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