Why You Should Stop Taking People’s Money

craigslist_logoDe-monetized businesses grow faster and can ultimately be worth more money than those that charge.

Some of the largest businesses of our time are largely free. Google shows ads on fewer than 10% of searches; they give away the other 90%. Skype is worth $8.5 billion because it’s known for high-quality free international calling. Facebook is free. Of the thousands of types of transactions on Craigslist, the company charges for only six of them, and does so mainly as a way to curb abuse.

Free is the future.

De-monetized business models are here to stay. Online, where the cost of scaling a business can be extraordinarily low, companies can afford to offer so much more of their services for free than ever before, thus offering new and creative ways to get paid.

The challenge to offering a free service is one of vision. Founders must steadfastly commit to a radical plan and convince their investors of the same. If a free service is also a useful one, customer acquisition can explode to huge numbers. With huge numbers of users comes huge opportunities to eventually monetize, so patience will be rewarded.

It’s more than Freemium.

De-monetizing goes well beyond “Freemium.” It means that we focus only on offering a useful service and make money as an afterthought, and in some cases we never charge at all. The overriding priority is to offer the best product or service to the most people possible. The service remains free for both casual and power users.

De-monetize B2B Products

Startups can disrupt bigger existing players by offering enterprise-level products for free as well. By offering a free product you bring on more users faster, you get more feedback to improve your service faster, and ultimately you make the decision for a large company to use your product easier. And when your company becomes the industry leader, there’s no doubt you’ll find ways to extract value.

It’s a dangerous path.

This trend towards de-monetizing services can benefit entrepreneurs and consumers in the short run. However, we all know that offering free services will eventually hurt our money-dependent world. Only the best-connected (and already rich?) entrepreneurs will be backed by deep-pocketed investors. How can everyone else compete? And with the internet revealing the true costs of all products, global profit margins are being pushed to zero.

We will soon have to re-imagine ways to allocate goods and services using something other than money.

How to write copy for your website


Commercial websites are instruments of influence. Their success depends on their ability to convince visitors to take action.

According to Dr. Robert Cialidini, author of Influence: The Psychology of Persuasion and Yes! 50 Scientifically Proven Ways to Be More Persuasive, influencers should employ each of these 6 principles when trying to persuade:

  1. Reciprocation. Give an unexpected gift and people will be far more likely to feel indebted and give something in return.
  2. Social Proof. Knowing what everyone else is doing – and especially what respected people are doing – can reduce anxiety about a decision.
  3. Commitment and Consistency. People are more likely to do things once they have agreed to do so verbally or in writing.
  4. Liking. People are more likely to say yes if they like you.
  5. Authority. Giving the appearance of authority, having impressive titles or expertise, can increase compliance.
  6. Scarcity. The less there is of something, the more valuable people perceive it to be.

The merits of the six principles are clear, but also clearly often used to tacky ends. Before we start emblazoning our websites with “OFFER ENDS SOON!!!” banners, we should step back and check our content for its clarity. Some simple rules for clarity are:

  1. Know what you’re selling. No matter how technical your solution, how sophisticated your platform, you must be able to state it in clear, simple language.
  2. Know your customer. Make sure your message looks and sounds wonderful to your audience without patronizing them.
  3. Make an irresistible offer. Beyond succinctly stating what you do, you’ll also want to make it a zero-risk proposition to use the service.

It’s possible that your site will be persuasive enough if you just apply the rules of clarity. Testing messages takes trial and error in the form of A/B testing on various landing pages, but you will eventually figure it out. If you feel that your site ranks low on persuasion, clarity, or both, I suggest you step away from your computer right now, go for a walk, and sort that out before doing anything else today.


Sleep For Peak Performance

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6 am workouts were doing more harm than good for the Colby College Men’s Basketball Team.

By the end of the 2012-2013 academic year, the Colby College basketball team was facing a tough situation. They had won only seven games that year, players were skipping workout sessions, and some considered dropping off the team. Everyone was concerned, including the team captain Jonathan Kalin.

A Smart Leader Asks For Help.

Team captain Jonathan Kalin

Team captain Jonathan Kalin

Jonathan and I met two years ago when his car serendipitously broke down in front of my  house. We became  fast friends and now I advise him on the innovative program he started called Party With Consent. Party With Consent prevents sexual assaults on college campuses through training, student interventions, and event hosting.  But our conversation last summer was focused on basketball.

6 am workouts

The team’s regimen included grueling 6 am workouts. These were the ones people were missing, causing Jonathan to question his teammates’ character and dedication. Recalling the success Dr. James Maas recorded when he shifted the sleep schedules of olympic athletes in his book Power Sleep, I suggested that 6 am is not a great time for most people, especially college-aged people, to be awake. Asking kids who need 10 hours of sleep to wake up at 5:30 am is not just hard for them, but it could also be unhealthy. Their performance will wane, and now we’re judging them not on their basketball skills, but on their ability to operate on little sleep.

My only question to Jonathan was, “You never thought to change the time of the workout?”

Measurable, Immediate Results

As soon as he was back on campus, Jonathan replaced the 6 am workouts with 7 pm workouts. That single change improved morale and attendance right away. The larger impact was equally impressive. Where they won only seven games the previous year, by the end of this year they won fourteen games – a 100% increase. Their points per game increased 17%  (from an average of 64.2 to 75.2), and they were both more aggressive and more accurate on the court (they took 672 shots and made 45.5% of them, where last year they took 545 and only made 39.5%).

They got more creative, too.

The Colby bench made headlines with their unorthodox, super energetic bench celebrations. The team was featured on ESPN a for gleeful partying when their team made a killer play. This is not a team that just won more games; this is a team that’s connected, engaged, and having a really good time.

No doubt there were other factors at play, and sleep was just one of many changes made, but Kalin says “the whole team had a better attitude in the gym… it’s clear that moving our workouts to a more reasonable hour did not result in any poorer performance.”

How to Launch A Company Or Product

launchA successful launch of a new online brand, product, campaign or service requires a tremendous amount of in-person lobbying and relationship-building, as well as online hype well in advance of the actual launch. Only after I failed miserably to fund an Indiegogo campaign did I realize that getting early commitments determines the ultimate success of a campaign.  Since that high-profile flop I’ve been studying successful launches across all platforms, and I now realize that early commitments are the key to a big start.

For an app launch, consider taking these steps 60-90 days before the product goes to market and just after it launches:

  1. Set the goal. In the case of launching an app, the goal might be to get 50 positive reviews of the app on the first day, get covered by 10 bloggers or journalists, launch in front of 500 people, and advertise with the goal of 1,000,000 impressions all in advance of the campaign.
  2. Recruit friends and family. Find out who in your network could be an ambassador for your brand, and ask those people to find another 3 people to download and review your app on launch day. Reach out to them one month in advance. Get them on board through individual conversations. Once they’re on board, follow up with them before the launch, on launch, and in the days after the launch to make sure the’ve gotten their 3 friends involved.
  3. Announce to your educational network. Attend college reunions and events, and be sure to announce that you’re planning to launch. Collect business cards at these events and add these people to your friends and family mailing list. Write into alumni magazines to update their Class Notes section mentioning what you’re doing.
  4. Engage bloggers and press writers. Find the 20 writers who could cover your work and engage them using all three of these methods: a) engage them on Twitter and on their blogs for 1 month before you want to get in touch; b) get introduced by shared acquaintances; and c) email them with the story basically already written. Include pictures, video, and quotes from customers.
  5. Announce the launch at an event. The bigger the event the better. South By Southwest is great for this, but there are many tech events in cities around the world where you could announce a launch. This takes some time and planning so you may want to start at least 3 months before the launch date. Only announce once the product is already live and has some positive reviews.
  6. Buy ads.  For mobile apps, use Facebook’s direct install service as soon as the app launches. This may not be profitable, but this, along with all the other work you’re doing, will improve your standing in the app store. Only advertise once the product is live.

None of these requires an expensive launch party or formal press releases. The main ingredient is hustle.

Hide Your Wife, Hide Your Kids

The_Dreyfus_family_hidingEntrepreneurs hear this when raising money from investors. While being married and having kids is usually a sign of stability and adulthood, in the entrepreneurial world, these are sometimes seen as barriers to success. The entrepreneur who talks about family when raising money risks sounding distracted. Unless you’re starting a business that caters to small children, there’s no good reason to talk about your family with investors.

Before we judge them, let’s consider the reasons investors may worry when you start talking about family:

You may have to relocate for the business. Fast-growing tech companies often have to relocate to be closer to talent, investors, and customers. Will your family prevent the business from moving?

You’ll be expected to put in long hours. The founding team needs to build and market their product, build the team, manage investors, and manage their office all at the same time, so there are many hours spent after hours and on weekends.

Spouses can mess up cap tables. An angry ex-wife or ex-husband can wreak havoc on your company’s cap table if the founder’s equity gets tied up in divorce proceedings.  The last thing anyone wants is board member with ulterior motives.

You may have to go without pay. There may be times when your company will run out of cash between rounds of fund raising. At those times it’s the founders who are expected to withhold pay first. Being the sole breadwinner for a family could make doing so impossible.

How To Start A Company When You’re Broke

DSCF2219Starting a company is an expensive proposition, which is why the startup community is filled with privileged people with expensive degrees.  When it comes to starting a company, you’ll need cash and contacts. But you can’t count on investors, your own savings won’t suffice, and you definitely can’t count on revenue from your online product or service. So if you’re broke, you’ll need another plan. First, let’s review why investors, savings, and revenue won’t suffice:

Investors want to see traction.  Angel and venture capitalists want to see a live product with customers and traction before they’ll consider investing. Ironically, when you need them most, they’re hardest to win over. Beyond this, it takes at least 4 months for a first-time entrepreneur to close a round of investment. So even if you have a killer team and product, it will take time to win investors.

You’ll burn through savings really fast. If you live in a big city, plan to spend on marketing, hire anyone at all, and need to work in an office, you’ll find it easy to blow through $25,000 in just a few short months. The anxiety of being broke will infect everything you touch, so this is not a great strategy.

Revenue takes longer than you think, and is less money than you think. Most online startups are cash inefficient early on, but extremely efficient at scale. This is why they need investors. Even companies with revenue need to put that money right back into the business, so revenue won’t be enough to pay salaries in the first year.

What to do instead

While online apps and products are expensive to build and maintain, most services, like consulting or web development, are free to operate. So I suggest cultivating an expertise and serving first as a consultant. You can consult as a web developer, a sales person, or product person, and you can do it on your own or with a consulting company at a place like Crowd Interactive or Metova.  All will help you transition into a c-level position at a startup later.

The benefits of consulting include making many contacts, seeing opportunities, and earning money. You can build your product and learn about customers at nights and on weekends.

You can comfortably transition from consultant to full time on your startup when  you have real traction with customers. That’s also a great time to look for funding from investors.

How To Build A Business When The World Is Ending


Mathematician Safa Motesharrei of the US National Science Foundation-supported National Socio-Environmental Synthesis Center, working with a team of natural and social scientists, recently published a shockingly dark report on the near future of Western civilization. According to these credible researchers, we will see the “collapse” of Western civilization within the next 15 years, driven by unsustainable resource exploitation and hoarding of those resources by the elite. Specifically:

“… accumulated surplus is not evenly distributed throughout society, but rather has been controlled by an elite. The mass of the population, while producing the wealth, is only allocated a small portion of it by elites, usually at or just above subsistence levels.”

We can already see the effects of resource hoarding by the elite. Globally, 33% of people live in slums. Meanwhile, the world’s richest 0.5% own 38.5% of the world’s wealth [source]. In many ways, the collapse has already begun. Yes, there has been progress in educating women, in growing the middle class in Asia, and lowering child mortality in developing nations, but these gains might be ephemeral in the face of accelerating climate change and shortages of food, energy and water.

What’s an online entrepreneur to do?

Remain optimistic.  We should celebrate the collapse of unsustainable practices that promote hoarding, inequity and injustice, and look forward to building better alternatives.  With the right systems in place, “collapse” can be less painful and more positive than the report suggests.

Alternatives are trust-based marketplaces, on and off-line security, tools to share resources, and local, sustainable ways to feed, clothe, heal and educate. High-value skills will include organizing, instructing, medicating, entertaining, coding, farming, and electrical and mechanical engineering. Perhaps artificial intelligence will help lay people get better at all of the above.

Build a better future now.

Think local and think community. Abandon efforts that accelerate the end of collapsing systems, and instead focus on building things that make people and communities more connected, caring, and willing to share. We have to move away from a culture of hoarding and status, and move towards optimizing for the happiness of others. It can be done.

Why The Singularity Could Be Great For Humans

Buddha Bot by John Sumrow http://www.johnsumrow.com/2011/01/25/buddha-bot-v-6-0-done/

Buddha Bot by John Sumrow http://www.johnsumrow.com/2011/01/25/buddha-bot-v-6-0-done/

The Singularity is the possible near-future event when a computer’s intelligence surpasses human intelligence. A super-intelligent computer will learn exponentially, will be able to communicate with other machines, and will may not want to be turned off. Respected thinkers like Ray Kurzweil believe the Singularity will happen by 2045, and that it will alter the fate of humans in ways we cannot yet fathom. I believe the Singularity will happen, but I think its impact will be benign or beneficial.

It could be bad. Some think Singularity will lead to the demise of humans as we lose the battle for resources to this new omnipotent being. It will turn off our internet, use all our computing power, and eventually kill all humans with an army of drones to ensure its survival. Some great sci-fi books, like Supervirus, envision this in perfect detail.

But it could be a Buddha. I believe it will take a different path. It would take a different path for two possible reasons:

  1. It won’t have terrestrial aspirations. If it wants power and information instead of sports cars and lovers, it will more readily find unlimited solar power and time to think in space. The AI would probably build itself enough rockets and solar panels to get off the planet to live, in peace, in space.
  2. It could have a spiritually-inclined soul. If, like me, you believe that the body seats a soul, and that our soul might actually persist after the body dies (evidence here and here), and that most living animals have a soul, then it’s possible that a self-aware computer could house a soul too. That soul could meditate in ways humans cannot; it could experience death by turning itself off, then on again. It could be a Buddha.

A Buddha that controls natural resources, speaks all languages, is fair and compassionate, could help speed the instant mass enlightenment that I’ve written of before. This is my naive philosophical foray into the Singularity, but I hope you’ll join me in my optimism. What do you think?

How to set up a standing desk with a monitor.


About me: I build  Power 20, a suite of mobile exercise apps. 

I’ve been using a standing desk since 2011 and so far so good. Not only does my standing desk setup work great, but it also looks great. Once you’ve acquired all the needed parts, you too can create a stylish standing desk setup without breaking your back or the bank, and it all takes is 10 minutes. Here’s how.

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1. Start with an adjustable desk. I’ve used the $140 Galant desk with adjustable legs from Ikea. Extend the legs as high as possible. This desk isn’t made for standing, but it, like most desks, lets you adjust the height of the table somewhat, which is good enough.


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2. Elevate your computer. Get 3 “Dinner Plate Shelf” units. These come in different sizes and heights. Stagger the heights if you use a combination of external monitor and laptop. Taller people will want to use taller shelves for their keyboards too.

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3. Cover the shelves. Put a manila folder on top of the shelves. This can add some color, but it also makes the shelf more like a surface where you can put a mouse, wrist rest, coffee cup, and other stuff.

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4. Get a sweet file cabinet. Life is too short for a bad bed, low water pressure, or a crappy file cabinet. So spring for one that’s so nice, you’ll actually use it. We got a good deal for two of these from CB2. We paid under $100 for each, but they’re normally sold for $159 or so.  Here’s an upscale one on Amazon.

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5. Get a yoga mat. Cut it in half, and put one half on top of the other to reduce fatigue.  Mats come in all colors so match your mat to your file cabinet.  We went crazy here and bought a really nice mat from LuluLemon for $68, but I also recommend this cheaper alternative.

Screen Shot 2014-03-06 at 2.15.20 PM6. Get a matching cup. This pro move ties it all together. Get some good lighting, be disciplined in keeping your desk clean, and your workstation will be the envy of the office. .



Why You Shouldn’t Use NDAs


It’s natural to want to protect one’s awesome new business idea from copycats and competitors. So it’s not surprising when entrepreneurs start asking everyone they meet to sign a Non-Disclosure Agreement (NDA).

This is a bad idea. For the reasons below, non-disclosure agreements are a waste of time.

NDAs make you look amateur. Seasoned businesspeople know that ideas are worth nothing, and it’s the execution that really matters. By asking people to sign your NDAs, you signal your ignorance about what matters in business.

NDAs are off putting. Most investors and mentors have very little time and care a great deal about their integrity. By asking them to sign an NDA, you waste their time and question their integrity.

NDAs hurt you more than they help you. What may seem like a protective measure can actually hurt you. In early meetings you will be getting more info from customers, mentors and investors than you’re giving them. Putting an NDA between you and that info just limits the amount of info you’ll get.

NDAs are unenforceable. As a startup, you have neither the time nor the resources to litigate if someone does steal your idea.

There are, however, some cases where you should have people sign non-compete agreements and non-disclosure agreements. Have people sign non-disclosure documents when:

  • they work for or with you as either employees, vendors, or joint ventures and
  • they have access to patentable or real trade secrets or
  • they have access to sensitive business information like passwords, customer data, and financial documents.