Ryan Waggoner » Social Media

Check out the new DailyPath Trail Guide (a daily guide to moving forward)

Ryan W. — Wed, 25 Jan 2012 18:44:58 +0000

Very quick note, just wanted to give you all a heads up that my startup (DailyPath) today launched The DailyPath Trail Guide, which is a blog with short posts on self-learning, productivity, motivation, lifehacking, and moving your life forward.

Check out our first post below, and make sure you subscribe!

How Cheating Has Opened the Door for Real Learning

Expect the worst of people

Ryan W. — Fri, 17 Jun 2011 04:12:50 +0000

I’ve been doing freelance web development for four years, I was a product manager at a major Internet company before that, and I’ve been building products of my own for the last five years. I’ve also spent a ton of time exploring products and ideas that fellow entrepreneurs have launched. So I’ve spent a lot of time working and looking at technology product ideas, whether they belonged to friends, employers, clients, or myself. And the sad truth is that most of these products, mine included, suck. Big time. They have no hope of any real traction or success. I thought I’d share a piece of advice that I think would be helpful to solve 95% of the product problems that I see.

When thinking about user behavior, expect the worst of people. Expect them to be stupid, lazy, greedy, cynical, and impatient. Because for the most part, they will be. Not in general, but when compared against the idealistic “User” that many would-be entrepreneurs seem to picture in their mind. In general, people are busy and overwhelmed, and have very little time or energy to check out something new. And even when they do, they’re constantly being bombarded by new things from entrepreneurs. Why are they going to check out yours?

The problem is that most entrepreneurs are optimistic people by nature. You have to be to invest the time and money that it takes to start a company. But optimism can be really dangerous to a fledgling business. It can subtly convince you that the unlikely is likely. It can convince you that people will go out of their way to buy what you’re selling.

Fundamentally, virtually every new startup is asking people to change their behavior in some way, whether large or small. As a general rule, people do not like change, so you must make this change as compelling and painless as possible if you have any hope of success. And optimism will lead an entrepreneur to believe that the pain of the changes they’re asking users to make isn’t really that bad.

The optimistic entrepreneur believes that users will fill out their 15-field registration page to check out the amazing new product. The pessimistic entrepreneur knows that 99% of users will leave and won’t ever come back, so she works really hard to make it easy to try the product and get hooked.

The optimistic entrepreneur puts share buttons all over the page, thinking that users can’t wait to share their new discovery with their friends. The pessimistic entrepreneur knows that he has to appeal to the user’s self-interests, and offers a bonus or other benefit for users who share the site with a friend.

The optimistic entrepreneur thinks that what they’ve created is so compelling that people will return. The pessimistic entrepreneur knows that the average person remembers 7 URLs, plus or minus 2. The pessimistic entrepreneur knows they can’t expect people to remember to return to their site.

I’ll give you an example of that last one: woot.com is a daily deal site that offers a great deal on a particular item every day. They sold last year to Amazon for $110 million. Huge win, right? From 2009 to 2011, another daily deal site (Groupon) went from $0 to a $6 billion offer from Google. There are tons of differences between the two models, but I am absolutely convinced that Woot could have been bigger if they had taken a page from Groupon’s book and focused on building a mailing list to offer their deals to. I first saw Woot years ago, but I’ve been back maybe twice. I just don’t remember to go check it out every day. But I never forget to check my email, so I always see what Groupon has on offer. And yet the Woot.com homepage still has no place to sign up for an email notification of their deals.

You get the idea. The challenge is that you have to be an overall optimist, and you definitely don’t want to grow to hate people, but you kind of do need to expect the worst from them when actually designing your product.

Of course, creating a great product is only half the battle; you also have to market it well. But that’s a post for another day.

How we paid 50 strangers $5 to pick our startup name

Ryan W. — Fri, 04 Mar 2011 12:41:19 +0000

The startup I cofounded with Ben Rasmusen recently underwent a name change from 21times to DailyPath. We had chosen 21times as a placeholder, and weren’t entirely thrilled with it. Then when we couldn’t secure the 21times.com domain name, we started looking at alternatives. We spent some time looking for names that a) we liked and b) were available. Lots of names met criteria (a), but almost none met criteria (b). We finally ended up with a shortlist of about 6 names that either we could buy or were unregistered.

But how to choose? Before spending hundreds of dollars to buy a domain name and then investing in a logo and other design assets, we wanted to be sure we had the right name.

One of the things we’ve learned over the years is the importance of customer development. As this new startup has a broad consumer audience, what we really wanted to know was which name the typical consumer liked the most. Posting to our Twitter and Facebook streams yielded little response, so we started looking for some way to get our list of potential names in front of a bunch of strangers, hopefully without spending a fortune.

Enter Mechanical Turk. In case you’re not familiar, Mechanical Turk is a marketplace on Amazon for short, tiny tasks that only a human can do. If you’re a startup, you might use it to have people tag photos on your platform, or identify inappropriate posts. Things like that. You can price each task however you want, down to a few cents.

Worth a try, so I setup a survey on Mechanical Turk and set the “reward” for each answer to ten cents. However, I didn’t want people to just click a random answer just to get the ten cents, so I also included some questions about their demographic (age, gender, income, education), and some open-ended questions about why they liked or disliked the name, as well as questions about what kinds of things they’d like to learn if they had the opportunity. I did the initial run for 50 different people to respond, and published the survey.

I honestly didn’t think I’d be able to get 50 responses. I mean, it’s a freaking dime. But I was wrong: after only a few hours, we had all 50 responses. And some people took the time to write multiple paragraphs about which names they liked and why. Completely bizarre. DailyPath was the clear winner, with more than twice as many favorable responses as the next contender.

Best of all, the total cost was $5. Not the last time I’ll be using Mechanical Turk. If you have a question that you’d like 50 people to answer and you have $5, give Mechanical Turk a try.

Feb 2011 Blog Income Report

Ryan W. — Wed, 02 Mar 2011 06:03:50 +0000

The bloodbath continues:

Is being connected making it harder to connect?

Ryan W. — Tue, 22 Feb 2011 13:55:28 +0000

I recently read an article by an author worrying that our smartphones and other gadgets are becoming an extension of our brains, so that when they’re not available, we’re helpless and unable to function properly. It reminded me of an experience I had while stranded on a train for three days in rural China.

In January 2008, as part of our trek around Asia, my wife and I boarded a train in Hong Kong and traveled to Beijing, a journey of more than 1200 miles. The train was one of the nicest I’ve been in, clean and airy, private rooms with ensuite bathrooms, and electric outlets in each car. But of course no Internet, and we didn’t have cell phones for China. However, the journey to Beijing took about 24 hours and was pleasantly uneventful.

After a week of sightseeing in Beijing, we boarded the train for the return trip to Hong Kong. The first few hours went as expected, but then the train ground to a halt. We assumed it was just a minor problem, but the minutes turned into hours and it was almost 12 hours before the train moved again. This pattern would continue for three days, with us sometimes sitting for 24 hours on the track without moving. None of the train staff spoke English (or were willing to), so we didn’t really know what the issue was. I was bored and frustrated within a few hours the first time we stopped, so I wandered down to the dining car to have a beer. That’s when I met the old-timers.

The first guy was an elderly British man who taught at the university in Beijing. He was a big guy, a little gruff, and with that utter lack of concern that probably only comes from living in China for years and being used to these sorts of snafus. He spoke enough Mandarin to determine that the cause of the delay was weather-related, but that was the only info he could get out of the staff. Another elderly man, also British, took to joining us in the dining car and the three of us spent the better part of the next few days chatting over beers.

I don’t recall if it was a lack of reception or what, but for some reason their cell phones weren’t working properly, so we were effectively cut off from the outside world, so all we could really do was drink and talk.

And talk they did; they both had led fascinating lives, lived and traveled all over the world, served in the military, had multiple interesting careers. They told me about their travels, their jobs, their families. And we must have drunk cases of that shitty Dutch beer.

The level of connectivity and reliance on gadgets does worry me sometimes, but not because I wonder what will happen if it’s missing. People adapt quickly, so I doubt that losing access to our technology would be more than a temporary frustration. No, I worry because I wonder what we’re missing because we have the technology in the first place. The chances of me talking for hours with an elderly gentleman today are effectively nil, unless there’s some kind of blackout. There’s just too much to do and see online for me to wander down to a bar and spend a couple hours talking to a total stranger. And it’s not just me, either…all the strangers are busy too. Even the old-timers are on Facebook now.

I don’t recall a lot of those three days, but I do remember those conversations in the dining car, over lukewarm cans of Dutch beer. And thinking back now makes me feel…wistful? I have a sense of sadness, because maybe these kinds of opportunities for connections were once around if you looked, but now they’re disappearing altogether.

21times is now DailyPath

Ryan W. — Fri, 11 Feb 2011 06:34:43 +0000

I wrote a post a couple months back about 21times, a new project I’ve been working on with Ben Rasmusen. We launched as a course for application developers to build and launch an app in 30 days. The response has been overwhelming, and we’re expanding in the near future. If you’re not a developer, don’t worry, because we’re including some non-technical courses and topics as well.

As part of this change, we wanted a new name, and we’ve decided on DailyPath. The domain isn’t active yet because we literally just got it, but I was too excited to wait to share. Let me know what you think of the name and the logo. And if there’s something you’d like to learn or accomplish, let us know!

January 2011 Blog Income Report

Ryan W. — Tue, 08 Feb 2011 04:56:35 +0000

If you’ve been reading my monthly income reports, you’d see that my goal for 2011 was to get my blog to the point where I could live off of the monthly income. In December 2010, I met my goal of 20% growth over November. Just barely, but I met the goal. If I can average a monthly income growth of 20% through the end of 2011, I’ll be well above my target monthly income.

But I opened 2011 by screwing that up. January 2011 was the first month that I didn’t meet my goal of 20% growth in income. In fact, I made less than in December. A lot less. It was a bloodbath, actually.

I made just $219.38 in January 2011, down about 73% over December 2010, when I made $809.54.

So why did I lose so much income? Two primary reasons:

My post quality just wasn’t as high. I’ve been busy with some other projects and I’ve not had as much time to dedicate to researching and writing posts. This is something I’m making a big focus in February and March.
Traffic is way down. A good portion of my traffic growth over the last four months of 2010 was the fact that I was getting lots of posts to hit the homepage on Hacker News, which brought a lot of traffic. But in January, not a single post of mine hit the homepage, despite several garnering enough votes to do so. I dug deeper and apparently my domain is being penalized at HN for some reason. I don’t know why, but that’s the reason my traffic is down so much from that source.

So how am I feeling? I’m disappointed, obviously, but I’m neither surprised nor upset. Of the two reasons above, #1 is completely my fault and completely fixable, and #2 is something I’ve been expecting and preparing for. I realized a couple months ago that in order to grow this to something that could replace my income, I’d need to do two things:

I need to expand my audience. What the readers of sites like Hacker News want is not really what most people want. And while I’m sure many will accuse me of being shallow for commercial appeal’s sake, I really do blog about things because I enjoy helping people and exploring new ideas. And I’d like to try doing that for a wider audience, that’s all. As a result, I’ve been expecting to move away from traffic sources like HN; this was just earlier than I was hoping for.
I need to focus on subscribers. Being subject to the whims of social media sites is nerve-wracking and frustrating. It encourages cookie-cutter content with overhyped headlines, just to get attention. I’d much rather build relationships with a base of subscribers who are interested in the same things that I am and who are willing to take the time to get to know me and to learn to trust me. I would love it if most of my growth came from subscribers forwarding posts to their friends. That kind of relationship-based growth is harder in many ways, but much, much more valuable. And bonus: you’re not dependent on a 3rd party for your traffic.

So while I wanted to see January do better (and Feb isn’t looking amazing either), I’m still very excited for the rest of this year. I’m going to dedicate more time to content in the coming weeks, and I’m still working on several plans to grow the subscriber base. I’ll be sharing more about that in the coming weeks, but feel free to drop me a comment if that kind of thing interests you.

Why I’m bullish on a Facebook I don’t trust

Ryan W. — Fri, 21 Jan 2011 12:41:56 +0000

I wrote a post yesterday about the uncanny valley of advertising, and how we’re currently in this weird area where advertisers know just enough about us to make it creepy, but not enough to make it perfectly relevant. I made the mistake in my post of comparing a hyper-relevant advertising service to a friend, in that they know you intimately and can make incredibly useful suggestions for your life. Some people found this comparison off-putting, which I understand. I’m not at all suggesting that we replace our friends with advertising networks. I was searching for a metaphor for what a world of such hyper-relevant advertising would look like.

One of the things pointed out to me was that a huge difference between a friend and an advertising network is that a friend has your best interests at heart, while an advertiser doesn’t. Ignoring the fact that this isn’t always true (both Ford and Fred would be happy for me if I bought a new truck, even though it would be a lousy financial decision), in a world of hyper-targeted and hyper-relevant advertising, would we see advertisers and consumers interests align more? Maybe much of the anger that’s currently directed at these types of intrusive advertising is because we’ve never had really hyper-relevant advertising.

Or have we? Enter Google.

One thing that I find really interesting in talking with people who are very vocal about their distaste for advertising (in general) is that many of them don’t seem to mind ads against their Google search results. In fact, for many tech people I know, ads on Google are literally the only ads they ever notice, let alone click on. Why is this? I think it’s because Google offers this hyper-relevant advertising experience to some degree, but in a slightly different context.

We find out about new things in two ways: either we go looking for it, or we discover it through serendipity.

In the first case, we have a problem or a question, and we use tools like Google and Wikipedia and a knowledgable friend to find the answer.

In the second case, we still have the problem or the question, we just don’t know we do. So the answer finds us. It could be from a friend, from a book we happen to read, a story overhead on the train, etc. But the point is that we weren’t looking for this information, it found us.

Google was really the first company to nail hyper-relevant advertising for the first scenario. We go to Google to search for things, and we expect to get an answer back. And while building a search engine like Google isn’t easy, it’s a hell of a lot easier to show a relevant answer (whether ad or organic result) to an asked question than to a question a user didn’t know they had.

How do you show users an answer to a question they don’t even know about yet? And more importantly, how do you do it perfectly, so that they always care about that answer? That’s not just hard, that’s almost impossible. But that’s what hyper-targeted advertising for discovery (instead of search) would look like.

The only way you could do this would be to create a near-flawless model of a person, their relationships, their tastes, their hopes and aspirations. And to do that, you need absolutely ridiculous amounts of information about them. You would have to follow them around day and night and record every tiny thing they did.

And right now, no one on the planet is better positioned for that than Facebook is. They have it all, gobbling up billions of datapoints per day about people’s tastes, relationships, habits, everything. Only Google comes close to having that much data, but they don’t have anywhere close to the amount of social data that Facebook has. And who we know and interact with matters deeply, so having that data is crucial.

This is why I think Facebook could be worth the valuation they’ve got now. They can build an advertising network that offers just a glimmer of the kind of hyper-relevancy that I’m envisioning. Imagine being shown a special discount on Zappos on a pair of shoes that you were discussing with a friend yesterday. Or a buy-one-get-one-free deal on Fandango for The Green Hornet because you like superhero movies AND because you and your cousin Joey are both big Seth Rogen fans and Joey’s going to be visiting tomorrow and you’re not working because you switched shifts with Sabrina, who is off to a spanish lesson that she booked because she’s always wanted to learn it AND she’s visiting Argentina with her friend Eric, who got a great deal on the hotel because he’s trying to bulk up and the hotel has a great gym and…

You get the idea.

Now, if all this sounds a bit dystopian, I understand. A perfect model of you in a computer that’s predicting what you will and won’t be interested in? Even if it is a long way off, the thought is downright creepy. But I’m honestly not sure if that’s because it genuinely is creepy (and always will be), or if it’s because we just can’t imagine such a world. It might just be that we can’t picture a world where advertisers interests are aligned with consumers and people enjoy ads because they’re always helpful and relevant. A world where advertising genuinely improves the lives of everyone it touches.

Nah. I tend to think it’s just creepy, but it is fun to think about. What do you think?

We’re in the uncanny valley of advertising

Ryan W. — Thu, 20 Jan 2011 12:43:49 +0000

Image by Aaron Webb

I had a good discussion with a friend today about advertising relevancy. It started because we were discussing his concerns about Facebook and how much information they have, like your social graph, taste graph, browsing habits, etc. What I found especially interesting is that his main concern is that Facebook will sell or otherwise leverage this information with the purpose of delivering more targeted advertising. I had always thought that more targeted advertising would be a good thing; better to be shown ads for stuff I actually care about than more random noise like ads for diapers and viagra (about 30 years too early, guys). But my friend pointed out that more targeted and relevant advertising just means more goods and services that he doesn’t really need that he’ll be tempted to buy. I hadn’t thought about this before today, but after some reflection, I think he’s right. But at some point in the future, as advertising becomes even more targeted, he won’t be right anymore. Let me explain.

In computer graphics and robotics, there’s this concept called the uncanny valley. You know how sometimes you see computer-generated images or videos of humans that are incredibly realistic, but there’s something just off? You can’t quite put your finger on it, but it doesn’t quite look human, and the effect is rather, well, uncanny. That’s the uncanny valley. At some point in the past, our ability to mimic humans was so pathetic that no one would confuse a computer-generated human with a real one, not even at a glance. And at some point in the future, we’ll be able to produce images and movies of humans that are completely flawless and indistinguishable from the real thing. But in the meantime, we’re stuck with these “almost-humans” and the result is sometimes downright creepy.

I think we’re starting to reach that point with advertising. Ads in the past were designed for a mass-audience, or perhaps for a niche audience based on the channel in question. But they weren’t designed for YOU. And they were generally shotgunned out in the hopes that some relevant people would be caught in the crossfire. Then came Google and more contextual advertising in the form of search. Now advertisers knew exactly what question you were asking, and they could pay to provide an answer. But that still wasn’t really enough. What about things that people don’t know they should be searching for, because they don’t even know it exists?

So the next step was behemoth advertising networks just watching you, getting to know you as you skipped from site to site, and then using that information to show you ever more relevant advertising. The difference between search advertising and this form is that they’re using your history. Not what you’re doing right now, but what you’ve done in the weeks and months leading up to right now. They’ve built a profile just for you, and they’re using it against you.

That’s why you see ads on Youtube that mention your Google search history, or ads on a random site encouraging you to come back to that site you visited a few weeks ago. It’s downright creepy.

So isn’t this problem just going to get worse and worse until we’re all fed up? Maybe, but there is another way it could go.

What would a world look like with perfectly targeted and relevant advertising? A world where every single ad you saw was immediately relevant and useful to you? Would we even call it advertising at that point? Forgive another bit of creepiness, but that’s almost like a friend giving you advice. What’s the difference between recommendations from a friend and recommendations from a perfectly targeted advertising network? If anything, the friend is likely to be less useful.

And if that’s the future that we’re headed toward (though it might require strong AI), where advertising networks know so much about you that they only ever offer you something you really want or need, is that so bad?

Think of it this way: would you rather hang out with your friend who knows all the latest stuff in a wide variety of areas and is frequently offering you useful advice for your life, or the friend who spends half the time offering semi-useful stuff and the other half won’t shut up about a litany of things you care nothing about?

Why Groupon could be bigger than Google

Ryan W. — Mon, 10 Jan 2011 13:13:52 +0000

A couple weeks ago I suggested in a comment on Hacker News that Groupon could one day be bigger than Google. This was the response I got:

If there was ever a sign of a bubble, it’s this comment. Some local coupon startup thingy bigger than Google? u-huh.

~axod

Now, I totally understand this sentiment. Google is one of the world’s most valuable brands, is worth about $200 billion dollars, and posts ridiculous levels of both revenue and income growth every quarter. By comparison, most people have probably never even heard of Groupon. And yet I still think that by 2020, Groupon could be as big as Google, provided they don’t sell to someone else first (but that window is closing rapidly). And my reasons are simple: they’re growing faster than Google was, and their market is much bigger.

Groupon is growing faster than Google was

It’s hard to overstate just how fast Groupon’s growth has been. They launched just two years ago and were rumored to have made $500 million in revenue for 2010. They were also rumored to have turned down a $5.3 billion acquisition offer from Google, and have just filed to raise a $950 million funding round at a $6 billion valuation. Most of this round will probably be used to finance international acquisition. Groupon is probably the fastest growing company in history, and unless someone buys them in 2011, they’ll probably IPO in 2012 or 2013.

By comparison, Google was started in 1998 and went public six years later, in 2004. Their IPO valued them at about $23 billion. I predict that Groupon will reach that valuation by the end of 2012, a full two years faster than Google. More to the point, if someone had suggested in 2000 that Google was going to be bigger than the media companies and car companies, would anyone have believed them?

Groupon’s market is bigger

Comparing Groupon and Google isn’t necessarily apples and oranges. At the end of the day, they’re both advertising companies. Google derives 99% of its income from advertising, and differs from normal advertising companies in that it leverages technology to create audiences for ads. Groupon’s twist is that they take a slice of the actual transaction being promoted to the customer. This almost certainly means that a customer is worth a lot more to Groupon than to Google. Groupon also has the advantage of all of their customers asking them to send them emails every day with stuff they should buy. That’s like Google without the organic search results, just ads.

So how big is Groupon’s market? Well, the local ecommerce and advertising markets are huge, but I’d argue that Groupon’s market isn’t even local ecommerce, but just local commerce, period. The transaction takes place online, but I think many of Groupon’s customers buy deals to replace a typical local outing they’d be making anyway.

How big is the local commerce market? Well, the retail market in the US is about 2/3rds of the GDP. That values the retail market at more than $9 trillion. And that’s just the US. They just have to capture the tiniest of tiny slivers of this huge river of transactions to be bigger than Google.

No, I think Groupon is going to do just fine.