Lately, money’s been on everyone’s mind, so I thought I’d talk about having “enough” money.

What is enough? That’s a hard question to answer. To most, enough is at the far end of a rainbow; indefinite in amount and far away in time. It’s odd though, that something so important remains undefined. We like to know exact details of everything else in life, but why not the definite amount of enough? I blame it on Vegas.

I love slots. So much that I’ll reserve hours with the five cent slots on every trip. My biggest problem is winning. Within ten minutes of my first spin, I win. I don’t win the max, but I win enough to walk away profitable. Do I stop? No. Should I stop? Maybe. I don’t stop because I could win more. It says right above me that I could win more. So I keep spinning until I’m broke. I’m not really broke, just $40 bucks down.

So for a second, let’s pretend it’s not me in Vegas, but you. You’re a tech savy, guru, living in downtown Portland. You recently sold your Prius in lieu of Zipcars. A little hungover from your Vegas vacation, you hop on a plane. But on this plane ride home you scribble some notes on a napkin, pocketing it as your disembark. Late in the night, you can’t sleep because images of the napkin notations are zipping right and left. So you get up. The napkin quickly grows to a legal pad. Excited, you take some additional vacation days. You talk the legal pad into the beginnings of a business and eventually a prototype. You call your mom. She tells you to write a business plan. If you are picturing this dramatization, imagine me holding a large red stop sign. Before you do anything else, I have a question. How much money do you want to make (in a year)? And why did you call your mom?

I ask every start-up this same question. Some say millions while others say thousands. But from my experience, this is a deal breaker.  To most seasoned entrepreneurs, paying yourself is the last thing on your mind. But you have to at some point, and when you do, how much? After spending months crafting a business plan, have you actually thought through how much your satisfaction costs.

Understanding what’s “enough” is important because it will determine your company’s culture and direction. When I left IBM and started Intrigo, I was determined to make the same salary within a year. This meant that once my moderate salary was met, I had enough and the business could grow with the rest. Don’t misunderstand that I don’t like earning bonuses, but when it comes to start-ups, those first few years are all you get. And if you have money to grow, grow.

To illustrate this differently, I’ll use a client example. We have a client who wanted to make $12 million in their first launching year. And for two years, that revenue point has dictated a large scale, expensive marketing plan with high costs. But for those past two years, they have never received enough investment money to pay the required marketing costs. When we recently re-evaluated and decided to instead market to a single city, costs dramatically decreased, the campaign moved forward, and people started adopting. While the original revenue point does not directly convert to salary, their high expectations of “enough” crippled and cost a lot of money.

My point is: before you do anything else, figure out how much is enough. Then build your business.

On a side note…

While Intrigo is a open source, web application house, we tend to help clients with far more than custom PHP. This is by accident. We don’t ever intent to rework business plans, but without challenging our clients, our applications wouldn’t be successful. Applications and business models should intimately interact, but as application development inevitably exposes business edge cases, business models must change. I spend most of my time planning for and moderating these exposures. Even though Intrigo is highly technical, this blog tends to address issues of a less technical nature. I mean to communicate the common difficulties that more technical start-ups encounter.

For months, I have been watching our new business revenue steadily decline. Why? Well the easy answer is the economy. We work with start-ups, primarily funded by investors who are reevaluating their investments. And while contracts disintegrate, our workforce wants to get paid. For a small company like Intrigo, the effects are dramatic. So the once mighty and all powerful Intrigo is not so mighty. Being graced by years of luck and an unnatural sense of optimism, I’ve gotten an unpleasant taste of reality. But that’s ok. And that’s my point. In the start-up game, failure dominates progress. Without it, you never truly understand what must be improved upon. With each mistake comes a new model of thought. To most, this is uncomfortable. Those individuals should not be entrepreneurs.

I’ve always seen the corporate world most similar to engine power. How many horses you got under that hood? Well James Watt, the inventor of the steam engine, needed a way to sell his engine to a society that relied on horses, the industrial power of the day. He did some fancy math and determined that 33,000 ft-lbs./minute represents one horse power. While a bit optimistic, the number is still used today. Up until car manufacturers refocused on fuel efficiency, measuring cars by their horse power was common. For large companies like IBM, Microsoft, and Google, it’s all about intelligent horsepower. The more they have, the more they produce. So when you go corporate and I mean work for a company with over 50’ish employees, you’re a horse. More horses equals more power, as long as the company keeps feeding it’s horses.

On the other end of the “make money” world, you have the brand new startups and small entrepreneur based businesses. For them, it’s not about horsepower; it’s about efficiency and innovation. Hiring few specialized workers for the least amount of money to produce the best new thing in the quickest amount of time. Pulling from physics, I like to call this the “coefficient of innovation.” Whenever I meet with a new startup, I care most about how long they can sustain poverty and persevere through failure. If a startup can overcome the coefficient of innovation, they’ll at least moderately succeed. But overcoming is not easy. In fact, it’s a natural barrier of entry to success.

How does one succeed? Let’s first answer the question of how one starts. You have an idea. You are excited. You get others excited. You get money. And you begin to work. As time passes, the original excitement is converted to optimism as you hit the first of many roadblocks. Each of these distractions slowly chips away and the optimism becomes pessimism. People get frustrated. People get very frustrated. People loose faith. The thing about people is that they are influential. People like to believe in something, and as the owner it is your duty to re-invigorate their original beliefs. While it seems so simple, the dark side is quite tempting.

Some of us Portland business owners have lost some good talent because we neglected to see how good things really are in these bad times. Intrigo recently launched Ugreekrow.com, Wirehire.com, and Notehall.com and they’re all rocking through adoption. Before that, we launched close to 80 other projects in three years. But some recent, perfectly timed, events have clouded the once bright and cheerful optimism that previously propelled Intrigo. So I’m restructuring. And once again I’m very optimistic. My mother skeptically challenges my optimism as do several others, but what do we have without it. My point being, don’t ever give up, just restructure your approach.   

There’s a lot of early adopter angst out there. As a company, and as a geek, I play around with new applications and ideas every single day. I have more accounts than I can remember, and certainly way more than I use (which to be perfectly honest comes down to Twitter, Facebook, and LinkedIn, find me and add me :-)) Each day another web2.0 company comes along that promises to revolutionize the way I communicate, the way I work, and we all know that all but a rare few quickly drop out of our rotation and our use.

Product ideas don’t come quickly, don’t come easily, and there is no such thing as a get rich quick scheme. Sure, there are exceptions, applications become platforms and grow exponentially, all of a sudden there’s another 23 year old millionaire, but that’s playing the lottery.  One thing we continually preach is building your business around a mission.

Take, for example, the guys from UGreekRow (full disclosure, an Intrigo client). They’re entering a market in which they’ve seen a couple other competitors launch within their niche hoping to capitalize upon the success of social networks, trying for that get rich quick bandwagon type mentality. Meanwhile, the guys at UGreekRow have taken a completely different approach, focusing on how their product can improve the lives of Greek members. Instead of taking your run of the mill social networking features and pasting them onto a niche site, they’ve spent countless hours researching and meeting with Greek organizations and members. Their goal was to understand the biggest challenges and needs of the Greek system, one which they were deeply involved with during their academic career, and one they deeply care about improving and promoting.  They have then built the idea for their application around using social tools to address the most pressing needs of the Greek community.

This hasn’t guaranteed their success, but it has given them a tremendous springboard to jump from. They already have a large group of users itching to sign-up, and more importantly they have tremendous credibility within their community. Rather than being just another social network, they’ve used their core mission of promoting and improving the Greek community to position themselves as a company that cares about their market, in so doing engaging and growing their community while giving them tons of flexibility for future growth.

I think that’s the beginnings of the recipe for a sustainable, successful company.

Us Intrigees have hopped on the OpenID bandwagon. For me personally, becoming involved in the Portland community and companies like Vidoop and JanRain have really opened my eyes to the prospects and work going on with this piece of technology. Most of the conversations I hear about OpenID revolve around usability, including our own Nathan Bell’s thoughts on putting OpenID in the browser. However, I myself am not a tech guy, and see a bigger issue with adoption that needs to be addressed by those of us in the believer catagory, making it relevant to the majority of users.

The true promise of OpenID, in my opinion, is not just the ability to have a uniform sign-in, it’s the things that you can do once you have a unified sign-in. We often neglect what the web is and always has been, an avenue for communication. Every killer app that we use online, is killer because of it’s ability to improve our communication. Portable social graphs, ease of connections, and reputation building are examples features that greatly enhance the usability of almost any application, and are really only possible once a user owns their online identity. However, much of the benefits of the features comes once users switch to OpenID as their primary authentication process.

So while much focus has been placed on making OpenID more usable, I don’t think we as application developers have leveraged the capabilities of the technology to make it more used. The majority of internet users simply do not have enough accounts or frequented applications to have the legitimate need to unify their sign-ins. While they may think it’s cool, it’s not a huge obstacle to remember 10 usernames and passwords. But once we start making applications that leverage the power of a consistent identity, is when even the average user will begin to say, I need to switch to OpenID, or unify my online identity.

In my opinion, I say we stop working on ways to make OpenID work better, but focus on more ways to make it work for us better. Then we can get the technology to move forward.

Thoughts?

There is no bigger decision for most entrepreneurs than the first one, deciding the time is right to make a go of it. It’s the reason why I see post after post and book after book that are all about what you need to do to prepare, to plan, when the time is right, analyzing market and personal conditions…

Well my personal position on every single one of these items is pretty simple, who cares. The reality of starting your business is that you’re going to fail. No matter how good your planning is, how strong your product is, you’re going to make mistakes, have missteps, and deviate from every plan that you made prior to starting. The real question you need to answer is, are you ready to fail?

The beauty of failure is the opportunity to learn. To see in stark reality mistakes you made, and opportunities to avoid them. To capitalize and grow, not only your business but yourself and your person. Shedding the fear of failure allows you to recognize what it is, just another bump in the road so you know how your car reacts, giving you the chance to avoid and correct the next time. 

I work at Intrigo knowing that I’m going to fail, and that’s exactly why I chose to do it. 

This is poached from a conversation we had with one of our clients about making money on Facebook. I really wanted to post it, if not only for the insight, but for how much it reminds me of high school in Flagstaff. I’ve only slightly modified Dan Blaker’s words..

My initial thoughts about the world of Facebook apps:

There’s a small (but noisy) subculture of young import-car aficionados in Portland. They tend to gather on weekends in parking lots with their Hondas and Mitsubishis etc. This subculture is broken up into three subgroups: people who don’t have cars, people who have flashy cars, and people who have good cars.

If we break out Facebook users into similar subgroups, I’d say most Facebook apps cater to the flashy-car people. That is, the apps are fun and look cool (like a giant spoiler or under-car neon) but they don’t really do anything useful. And just as you can buy all manner of pretty (but useless) ground effects from a massive number of vendors, you can trick out your Facebook profile with a million pointless apps. Unfortunately, the lifespan of most of those apps is pathetically brief—people quickly get bored of flashy things.

For a Facebook app to be useful and persistent in the Facebook experience, it needs to have a real-world result. If an app saves people time or money or helps them legitimately connect with friends, they will integrate it into their routine and recommend it to others. This is not “viral” but it is sustainable and potentially very profitable. So let’s make the app equivalent of a new performance chip or a 3-inch mandrel-bent exhaust, not the equivalent of Altezza lights or “Type R” decal.

In my book, RFPs are evil. I know that’s a big generalization, but I normally avoid responding and actively pursuing any contracts that are solicited in this manner. To me, the RFP process is antiquated and broken, and also neglects what we at Intrigo do well as well as companies should be doing anyway. My experience with RFP seeking companies has lead me to this belief, they should go away. Here’s why I feel this way:

RFP=Inflexibility

An RFP tells me that you and your company has already figured out the exact project, budget, and timeframe in mind. Kudos to you for doing your research and working to understand the project that you’re looking to have. However, our entire philosophy at Intrigo is based upon collaborative partnerships with the people and companies we work with. The talent that we have shuts down when they aren’t allowed to challenge and grow. It’s the reason why our projects turn out the way that they do, and the reason why we have had the success that we have.

I can also tell you that I have never worked on a project where the scope hasn’t changed throughout the course of development. There’s always growth, new challenges, new markets, new competitors, new technology, and we intentionally attempt to build flexibility into our projects to account for changes and challenges in development. When you are strictly locked into an RFP and specific proposal, you can’t really change on the fly.

RFP=Competing on Price

This is the part that I find especially disconcerting as a service provider. Fluctuations in service levels, quality, and a host of other factors tend to get ignored when an RFP goes out. Most business say, this is what we need, who can do it the most cost effectively. Many times this isn’t the case, and you’re curious in hearing approaches from a few different companies, but standardizing it to such a point does not allow you as a business to really engage the companies you are planning on working with, or to see their individual creativity and passion.

That’s why my advice to companies looking for service providers such as Intrigo is this, make real contacts and have real discussions about what your goals are. Then see which companies meet up with your goals and culture the best. Standardizing the solution before you decide on a provider leaves you with little of value to differentiate upon.

13 months ago, a client asked about SEO. 1 month ago, a client asked about SEO. Intrigo gathered 27 new clients in that twelve month window, none asked for SEO, and it was wonderful. This article (hopefully) addresses why (plus some)?

Background:
For many years, I worked in the, (keyword) “non-profit consumer credit counseling” industry. Starting as a small company of three, (keyword) “debt consolidation counselors,” and myself, we decided, early on, to generate our OWN leads. I remember sitting down, with my boss, and hearing “$100K to generate organic leads should be adequate.”

FYI: You should hate leads. These are nasty little one sheets ($12-$35 each) that have all your personal information so “debt counselors” can call you at work, soccer games, dinner, on dates, but before 9pm.

Leads convert at different rates. Some companies sold leads ($25-$30) that converted at 12%. Most sold $15 leads that converted at 4-6%. A good counselor would go through 12-15 leads per day. So with an expectation of generating 36-45 leads with high conversion, I started spending money. I optimized, built out high PR inboard links, dined with search engine folk, submitted to directories, wrote hundreds of “keyword rich” content pages, etc. Six months later, our company was number three for the keyword; “non-profit credit counseling.”
The metrics were decent too. For only $35K (no pay per click) I was generating almost 50 leads per day that saw 25% conversion. Between our own lead generation and discovering a new, high converting, low priced lead source, the company grew to 65 counselors in ONE year. This increased the lead demand to over 700 per day. My SEO accomplishments paled in comparison to our new needs.

Eventually, after spending much more moola on SEO, I learned some very basic, but incredibly valuable lessons. These have proven to be great metaphors for Intrigo’s growth.

Lessons Learned:
First and foremost, build a good site. As I recently told a client, “Think of a billboard with a two sentence title, paragraph tag line, placed every 500 feet along a beautifully landscaped road on your drive to work.” The search engines love quality content and concisely accurate summaries of the content. They HATE the inverse (lots of nothing). And if you do things they hate, they reward you with poor rankings.

Blogs and wikis show up in so many search results because they survive solely on there delicious content. You want people to pull your RSS feed. Even more, you want a site that influences users to comment and interact. But you NEED good content and by this I mean, write content that is interesting, lacks clutter, and says EXACTLY what you want.

I “suspect” that search engines are companies who compete with one another. Yahoo versus Google. So as any good natured, intelligent company, you try to maintain a quality of service that supersedes that of your competitor. You go to search engines to search for something you may know little about. The quicker you find quality results for that ambiguous query, the more likely you will return again. Google and Yahoo compete on the quality of their results. So why would a fully “optimized” site filled with unnecessary (key)words and pages upon pages of meaningless content ever be ranked (well) by either? Beat’s me.

First, create a QUALITY site. THEN get people to talk about it.
You need authorities talking about your site. By talk, I mean link. And by link, I mean descriptively link. If my dietitian mother tells a friend about Intrigo, that’s dandy, but if Sun Microsystems tells their investor base about Intrigo’s usability niche, that’s a BIT better. To rank well, you need respected people, relevant to your site’s purpose talking about your site. I’ve seen a lot of companies spend a lot of money to “persuade” individuals to talk. But, if you have a purposeful site that helps someone with something, people will naturally talk.

BOTTOMLINE: There is NO magic. Just good sites.
This article’s (real) purpose was to illustrate Intrigo’s trade secret: it’s people (Intrigees). We are as ethnically diverse as we are skilled. Our talent, all IN-HOUSE, comes from France, Chile, Korea, Egypt, and of course the US. We have HCI gurus that work with our graphic designers and marketers who all work with our web developers who are all coordinated by some UI inclined project managers that show our testers who eventually make everything friendly for everyone. Our architects wait for questions. Every Intrigee works on every project.

Good development is about understanding EVERYTHING that makes a product sustainably succeed. We hired at least one of everything to work on our team. Our sites and applications are search engine compliant because they are coded perfectly. The interfaces are simple and need no tutorials. And our client’s users actually adopt them. We love working with startups because the applications we develop must be adopted. If they don’t, our clients are penniless to pay us.

So when a client asked me last month if we do SEO, I responded, “We’ll build you something that’s useful; well.”

Kind of a long title I know, but I thought it would be really good to start a conversation about the future of social networking.  Now that Facebook, Myspace, and LinkedIn have become a huge part of the daily lives of the majority of Americans, it appears that most of us early adopters are leaving, opting to use other services for our communication, like Twitter. I can personally say that this is definitely the case for me, where I tweet at least 5 times a day, and only check Facebook when I get the occasional message from one of my friends.

First things first, Twitter is a social network

Amongst the conversation about decentralizing Twitter so we no longer have to deal with their down time, I came across this really interesting article about why decentralizing Twitter wouldn’t work. The main point that I found so interesting was Twitter existing as a social network, but rather being based around your profile the way that Facebook is, it’s completely based around your quick thought blasts.  This means that I, as a follower of my friends, get a much quicker, and more complete view of my friends. If you follow me for example, you could very easily get a picture of what I do and who I am.  Plus, there’s no pressure to conform to anything, no guidelines for interaction.  It’s just your thoughts, right or wrong, funny or not, professional or not. That’s pretty darn cool, and why I find myself using Twitter more and more each day.  It’s simply a better communication platform than any other social network has provided.

That being said, Facebook and Myspace are not going anywhere

Despite the fact I haven’t looked at Myspace in like, ever, it still gets 74% of social network traffic. Now Myspace’s numbers are decreasing, but Facebook is still getting more traffic and more applications.  But that increase in applications is a big reason for the loss of a lot of the early adopters that Myspace suffered when Facebook launch, most applications do nothing more than turning up the noise.  Sure, a song in someone’s profile is fun for about five minutes, and then the song is over, and the next time you check a profile it’s just annoying.  And that’s the problem, the “just for fun” applications that spread the most quickly serve mostly as spam and noise.

What can Facebook do that Twitter Can’t?

The answer is simple, and leads to the way that Facebook applications can be made to be useful, context. A person’s friends, and more importantly the large amount of profile information that users work tirelessly to fill out can provide a context in which communication can be made more effective.

For example, does anyone actually want to be marketed to?

Yes, when they’re looking for the product that you’re marketing.  When I’m looking for a new car, I want to hear about cars.

All of that information is already waiting within someone’s profile, and when you enhance that with their friends information and input, the context of the communication, you have a formula for building something of value through the Facebook application.

Use the context to make something Useful

This seems to be the hardest part, because useful doesn’t always translate into really high viral growth, and most applications haven’t started to think of how they can make a user’s life better through the use of the application. That simple question will lead to better applications and a better user experience overall

So, in short, Twitter is now my preferred social network and communication platform, and will continue to be for the foreseeable future.  However, I’m not ready to give up on Facebook and it’s users yet. Just because someone hasn’t used the context to create value yet, doesn’t mean that it can’t be done.  In fact, I’m positive that it will be done.

Think I’m crazy? Leave some comments below, this is a conversation I’d love to continue to have.

Recently Facebook released their own personal guide to using Facebook as a venue for viral marketing. You can check out their work here, but I think their work was a little bit skewed to focus using Facebook ads.  While that’s completely understandable, considering that’s their business plan, all of us at Intrigo still think that there are many ways for businesses to utilize Facebook, and most business have yet to really tap into it.

The biggest benefit of marketing through Facebook is the automatic generation of word of mouth via the News Feed. This means that any interaction a person has with your brand gets blasted to every single one of their friends. The challenge, as a business, is to give potential customers and Facebook users a reason to interact with your brand on Facebook.  The easiest way to do this is by playing up the psychographic aspects of your brand in your Facebook interactions.

The psychographic elements of your company are the elements of your company that you want people to identify with. Essentially, it’s the personality of your company.  In order to have successful marketing via Facebook, you need to create a “face” and personality for your company that people can become “friends” with. This type of relationship is easy to see with lifestyle brands, things such as clothing companies, restaraunts, and clubs that really play on psychographics for their marketing plan. For example, I wear lululemon clothes because I enjoy yoga and pilates, and that lifestyle. As a Facebook user, I would become a fan of lululemon to tell all my friends about this part of myself.  Or, I really believe in the OpenID movement, and I want to become a fan of Vidoop so my friends know about the work they’re doing.

In order to best market on Facebook and other social media, you need to create your company’s personality. Whether it’s a cause such as being green, a lifestyle, or a culture, personalities are what people can best identify with in a social environment.  Then you can connect with customers that have the same personality, and best suited to you as a company.