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From eyeballs to clicks to ? Monetizing the Web

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I used what is now called the Internet several decades ago, back when it was the Arpanet and MIT was one of the few nodes in the country. I was even subscribed to a newsgroup whose title I forget, but whose topic was “Will the Internet ever be commercialized?”

I’m a big fan of the history of technology and I follow Christopher Mims, who writes about tech for The Wall Street Journal. His article Tumblr and the End of the Eyeballs-Are-Everything Era, sub-titled With an adult-content problem and only the vaguest idea how to make money, Tumblr was easy prey for trends bigger than itself is a short primer on how founders attempted to monetize their net ventures. The initial attempt was the advertising banner, and counting eyeballs was the compulsive activity of every founder. As Mr. Mims writes, every founder had the same idea on how to make money:

On the business side, it operated under the assumption that it could make money off its users the same way people had since the invention of the banner ad: Build a big enough audience, and “monetization” will take care of itself.

This is a variation of the [false] idea of “Build it and they will come.” Evidently Tumblr’s design was  “inherently ill-suited to advertising”, according to Katrin Tiidenberg, a social-media researcher at Tallinn University in Estonia who has studied Tumblr for years. And there was a worse problem:

Its impenetrability was a challenge to advertisers. On top of that, many of its users interspersed their posts on various fandoms, obsessions and memes with sexual content. “A lot of advertising clients, particularly in the U.S., get disproportionately nervous about being seen next to someone’s boobs,”

Advertisers instead turned increasingly to the ostensibly safer realms of Google and Facebook. Together, the two giants now suck up 57% of all digital ad spend, according to eMarketer.

Of course, we are long past banner ads and eyeballs, today it’s all about data, data that enables targeted advertising, which is far more effective than banner ads could ever hope to be. There’s an old saw about advertising: “Half of all advertising spending is wasted, we just don’t know which half.” That was true in the days of broadcast media, like newspapers, magazines and TV, where it was a one-size fits all advertising model, meaning that one-size fit very few very well. Today targeted advertising brings in billions upon billions of dollars for Google and Facebook.  And users are basically selling their identities for the privilege of using the ostensibly free services. Now the federal government wants to get involved in what users see on the web, what companies do with users’ data, and more. Meanwhile print media is dying as they “Replace analog dimes with digital dollars” and vainly seek for new business models.

But to me its survival of the fittest on the Web and what we have been seeing is an evolution of monetization models. Just like homo sapiens triumphed over other species due to our larger brains and better ability to adapt to changes in the environment, Google and Facebook have focused on constantly buying up the best and brightest brains extant. If any company threatens them, like Instagram and WhatsApp threatened Facebook, they simply buy them. And if they can’t find enough job applicants organically they just do a few “aqui-hires” where they acquire a company for its talents and they kill off their product.

No wonder the anti-trust forces in the federal government are awakening from their long slumber – basically since Microsoft was under the anti-trust microscope.

Where will this all lead? One of the technologies I’ve been watching – and waiting for – is the concept of micropayments to enable paying for microcontent. For example, I’m embarrassed to tell you, but I have a subscription to Vanity Fair. Why? Because virtually every issue there is one interesting and well-written article buried in hundreds of pages of ads for fashion and perfume. My dream is, and has been, to be able to buy that one article a la carte. None of the advertising or People style celebrity articles. Let’s do the math. I can get a subscription to Vanity Fair for somewhere between $12 and $24, depending on what deal I find. If I paid Vanity Fair $2 a month for that one great article they would have the same revenue, but only about 10% of the cost: no paper, printing, or binding! No shipping cost! Maybe I’d even like to view some of their cool covers or artwork for 25 cents each. But the killer problem that micro-transactions hasn’t been able to solve is that it’s totally uneconomical to use a charge card to pay for for buying anything that costs less than about $10.00. In fact many restaurants won’t take a charge card for a bill of less than $10.00.

But just as I waited over 25 years to see AI commercialized, it’s about 25 years since Ted Nelson came up with the idea of micropayments and even began to implement it for his Project Xanadu. Unfortunately Ted was – you guessed it, 25 years ahead of his time.

Just as iTunes enabled music fans to buy just the songs they wanted, not the entire album that was probably loaded with filler, NewCo will enable readers like me to buy just the articles I want to read, without all the other stuff.

Monetization models on the web won’t stop with personalized advertising. Perhaps the rise of crypto currencies will enable micro transactions for content. I already have a long list of magazines where I’d like to pay for micro-content starting with The New Yorker and all it’s cartoons every week.

So what Mr. Mims and other pundits seem to miss in articles like this one, is that the Web is a living, evolving thing, that it adapts to its environment like other living things. Print media will have to evolve or die; the same existential choice faced by the music industry. Blogs sites like Tumblr will have to do the same. And what saved the music industry? A new delivery and monetization model pioneered by Spotify – music streaming. All you can eat for $9.99 a month. My bet is that there will emerge a Spotify for print media that will crack the code just like Spotify did. Only it may take a few more years. I can wait but I’m getting impatient.

What you can learn from success stories

Screen Shot 2019-08-20 at 10.01.57 AMThere’s a truism in Silicon Valley and elsewhere that the best way to learn is from your failures. I don’t totally agree with that, but you can read about that in another post. Today I want to dissect a success story for the lessons it can provide founders.

Ordinarily as a startup mentor I wouldn’t be reading an article featuring a large enterprise like like Airbus. And having very little interest in finance, I would have even less interest in a story about Airbus’s finance tasks. But the title of this Wall Street Journal article, Airbus Harnessing AI in Bid to Save Millions on Finance Tasks, caught my eye due to one acronym – AI. And as usual, the sub-title is a great summary of the article:
The aircraft maker’s Americas unit is digitizing the approval of expense reports and payment of invoices.

After reading the article I realized it is a good case study of how to succeed with marketing new technology to an “old” company. I’ve added my comments after each quoted section of the article.

Airbus SE is using artificial intelligence to squeeze cost out of its finance function, an experiment launched in the aircraft maker’s Americas division that could save the corporation millions of dollars annually if rolled out in other regions.

Notice how this is framed as an experiment, or as we mentors would call it, “a pilot.” Note this is a geographically defined pilot, which is a good way to run a pilot as you aren’t having to deal with multiple languages or currencies from an international pilot.

The new process was deployed first in the Herndon, Va., headquarters of Airbus Americas. It has since been rolled out in most of the division’s other offices in North America.

Note how the companies first did a pilot in a single office before deciding to roll it out across North America. You want to test in the smallest meaningful unit of the business. Meaningful to both you and the client. Beware of scope creep!

It’s one of the latest examples of how companies across sectors are digitizing operations to increase efficiency, reduce human error and free up employees for tasks that require more human judgment, such as strategic planning, analysis and audits.

The author has done a great job of summarizing the pilot’s benefits to Airbus in one sentence. You need to do the same for your pilots!

“Companies can now automate highly repetitive activity at a lower cost with a higher degree of accuracy,” said David Axson, head of the CFO consulting practice at Accenture Strategy, a unit of consulting firm Accenture PLC. “This especially applies to high-volume-use cases like accounts payable.”

AI is just beginning to be used in professional services like accounting, so the quote from David Axson is another example of encapsulating the benefit of using AI in finance from a domain expert.

Manually combing through every line of a single expense report could take about an hour—more, if the receipt was in a language foreign to the reviewer. More still if there were red flags, such as missing receipts.

Sometimes reviewers took shortcuts, such as going on trust and approving an expense associated with a foreign receipt they couldn’t understand, to get through a pile of reviews. That could lead to errors, Mr. Masci said.

These are two generic benefits of automation: far times faster than manual processing, with far fewer errors. Founders need to apply these generic benefits to the specific problems of their client, as Mr. Richard Masci, the head of financial system services and compliance, at Airbus Americas has done. Airbus has just become a reference client for AppZen! Make sure your pilot agreement gives you the right (but not the obligation) to publicize your pilot after its successful completion.

The average time between submission to approval has gone from a couple weeks to a few days, and the workload for human reviewers has been cut by more than half, Mr. Masci said. Over time, the system will detect patterns to process information faster and more accurately.

N.B. how Mr. Masci has quantified the benefits to his company. Clients need to understand both the qualitative and quantitative benefits of your product. It would be interesting to know if AppZen and Airbus set quantitative goals for the pilot. It sounds like if they did they were met or exceeded.

The success of the expense-approval project also could pave the way for other digitization efforts outside of its finance function, Mr. Masci said. Which is why the expense-approval process is so important—it helps the company grow accustomed to the technology.

This may have been the way the pilot was positioned, if not it should have been!

Airbus initially had to get comfortable with the idea that humans aren’t viewing every line of the invoices or expense reports they’re approving. But trust in the new system was quickly earned: Mr. Masci said there has been a 70% reduction of human-introduced errors. He’s shooting for 90% in 2020.

Again Airbus is focused on quantitative measures of success, not a surprise in a financial division. But also notice that there is a need for continuous improvement. Just because the pilot went well, AppZen can’t rest on their laurels.

“The AI is not here to lay off, but basically to reshuffle activities,” Mr. Masci said. “We’re planning on reusing resources in a smarter way.

Finally Mr. Masci assuages the fears of employees who may worry about losing their jobs to AI. Any founder selling products using AI needs to be aware of employee, and especially union, fears of layoffs and address them head-on from the get-go.

If I was AppZen I might try to recruit Mr. Masci away from Airbus, he seems to have a very high level of customer understanding of the benefits of their product and great ability to communicate it 🙂

 

Charisma – innate or learned?

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I’ve long been fascinated by charismatic people. Probably because I’m totally the inverse, suffering from SAD – Social Anxiety Disorder. Rather than be the center of attention, I tend to be a wall flower.

I’ve met more than a few charismatic people in business, ranging from the wellknown, like Steve Jobs and Mitch Kapor of Lotus 1-2-3 fame, to the lesser known, like the late Wayne Oler, President of Addison-Wesley Publishing Company. So it was with great interest that I read The New York Times article today entitled What Makes People Charismatic, and How You Can Be, Too, sub-titled Simple tips to break through your social anxieties and make real, genuine connections with others.

Despite author Bryan Clark’s having talked to a couple of experts I find myself disagreeing with his thesis at charisma is a learned behavior and “you can learn it, too!”

The four aspects of charisma I’ve found are a high degree of self-confidence, extreme focus on the individual, enthusiasm, and strong communication skills.

Self-confidence

It’s difficult to say if people who are supremely self-confident are successful because of that self-confidence or self-confident because they  have been highly successful. I would go for the former, as I knew Mitch Kapor well before he formed Lotus Development Corporation and rose to fame in the personal computer industry. He was charismatic long before he became a mega-success. While my sample size is small, I’ve yet to find anyone who I would call charismatic who is not also a success. As a friend who worked at Apple used to say of Steve Jobs and others like him, “Never wrong, seldom in doubt.” And while I’ve never yet met Donald Trump what I’ve read of him is that he can be extremely charismatic in person in small, intimate groups. He certainly doesn’t lack for self-confidence.

Focus and attention

The second characteristic I’ve observed amongst the charismatic is a laser-like focus on the individual, whether listening intently or speaking. People like Steve Jobs and Wayne Oler made me feel like I was the only person in the room, despite the fact that there were several others – and one of higher status – in the room when Jobs visited my department at MIT. Extreme focus means shutting out all external and internal distractions, making it far easier to focus one’s entire attention on the individual they are talking with. (This is the exact opposite of the attitude of many of the rock stars I’ve met who always gave the the impression they were scanning the audience looking for someone more important than I to talk with.) I do believe one could be trained to at least emulate this aspect of charisma, but there is more to it than eye contact – though that’s important – there are doubtless many non-verbal cues entailed. The most simple example is people show engagement and attention by leaning forward. The tend to demonstrate lack of engagement by leaning back. I’d love to see Carmine Gallo, who has studied Steve Jobs’ keynote presentations in depth, to analyze his non-verbal cues given in the many videos of Steve. One does have to be careful not to let extreme self-confidence morph into arrogance, a situation not unknown by people who worked with Steve Jobs. While charismatic people may have an agenda with you, they hide it completely as part of their ability to focus their attention extraordinarily well.

Enthusiasm

I’ve yet to meet a charismatic person who lacks enthusiasm. In fact people like Steve Jobs take enthusiasm to the next level, appearing messianic about their products or causes. If you have read this far it may occur to you that charismatic people make good sales people. Certainly Steve Jobs was known as a great sales person. And I’ve yet to meet a successful sales person who didn’t evince a high level of enthusiasm for their products. The dictionary definition includes three important elements of enthusiasm: intense and eager enjoyment, interest or approval. Charismatic people tend to be overwhelming positive. That positivity is exhibited in an appearance of kindness and acceptance. And that positive attention can be uplifting to anyone who falls beneath its spell.

High verbal skills

Dr. John Antonakis, a professor of organizational behavior at the University of Lausanne in Switzerland, does a good job of explaining this aspect of charisma:

The most charismatic people in a room, he says, are those who speak metaphorically, providing substance to a conversation through exemplary use of anecdotes and comparisons. They aren’t recounting events but paraphrasing action while using facial gestures, energetic body language and vocal inflections to frame key points. They’re experts at using moral conviction and reflections of group sentiment, as well as employing questions, even rhetorical ones, that keep people engaged. In short, they just tell a good story.

Story telling can be learned, however it is far more difficult to learn speak metaphorically, using analogies, anecdotes, and metaphors. And while many  charismatic leaders have a great sense of humor, I don’t believe it is necessary to be charismatic.

If you believe that charisma can be learned then by all means read the full Times article.  You can even buy a book on the subject, The Charisma Myth by Olivia Fox Cabane, one of the experts quoted at length in the article. But I don’t think charisma can be learned anymore than a sense of humor can be acquired. But there are certain tricks those who wish to gain our attention employ, such as the way sales people will use your first name in every other sentence. People can emulate certain aspects of charisma but like natural athletes charisma is born, not made, in my experience.

 

 

Is trust busted?

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The dictionary definition of trust is quite interesting:

  1. firm belief in the reliability, truth, ability, or strength of someone or something; acceptance of the truth of a statement without evidence or investigation.

In today’s environment of “alternative facts” and “fake news” can we have firm belief in anyone? We have people still believing that the earth is flat, others that the moon landing was faked. Currently that financier Jeffrey Epstein was either murdered or assisted in his suicide. But as The Wall Stree Journal article Trusting Jeffrey Epstein Taught a Retail Legend a Hard Lesson: Be Careful Whom You Trust by John D. Stoll, points out, trust is necessary in business.

It’s a question that brings into focus the role trust plays in American business. Long seen as nearly as essential as money for the economy, it is as powerful as it is dangerous. Trust serves as the secret sauce in every transaction, business plan and employment arrangement. But, behind every Ponzi scheme, market meltdown and corporate fraud lies a serious case of misplaced trust.

What does this article about trust have to do with founders? Plenty! Leslie Wexner became a billionaire by founding the Limited and other retail giants. Yet he was duped out of millions of dollars by Jeffrey Epstein. However, as “Roderick Kramer points out most successful business folks are risk takers. Risk requires trust, and leadership types tend to overestimate their ability to size up people or situations.” Mr. Kramer did a study about ten years ago that showed that “about 95% of M.B.A. students were routinely placing themselves in the upper half of the class when rating their ability to size up the trustworthiness, reliability and honesty of fellow classmates.”

Why do so many people get duped in startups, as the investors and employees of Theranos, the million dollar fraud did? Another expert weighs in:

Alexander Stein, a human-behavior expert and founder of Dolus Advisors, consults on white-collar misconduct and said we get duped because we “outsource trust.”

“It becomes less about who we trust and more about what we trust,” Mr. Stein said. “It’s not the person, it’s the image of the person, or the persona and the brand.”

So what’s a founder to do? Well when it came to dealing with his Russian adversaries, Ronald Reagan employed  the Russian phrase trust, but verify. But if we go back to the dictionary definition, this proverb is an oxymoron: trust is the acceptance of the truth of a statement without evidence or investigation. Verification requires evidence and/or investigation!

There are two skills I try to encourage my mentees to develop that help ascertain if they can trust an individual or organization due diligence and testing.

Due Diligence

According to Wikipedia:

 Due diligence is the investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or contract with another party, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations.

The need for due diligence is inversely proportional to a founder’s personal experience and knowledge of the person or business in question – the subject. For founders the subject can be a prospective partner, candidates for staff positions; interested investors; professional service providers, like lawyers, bankers, consultants and accountants; contractors and vendors – in other words, virtually anyone and everyone a founder might do business with. The need for due diligence is also directly proportional to the importance of the transaction or business agreement. For example, you need to perform a lot more due diligence on a prospective VP of Sales than on the contractor who cleans your office. And more due diligence is generally required for a relationship than for a transaction.

But how do you perform due diligence? Excluding having actual direct experience working with a person or business, founders must rely on their subject’s reputation. There are two types of due diligence for reputation: primary and secondary research. Like market research, primary reputation research means communicating with people who know, and preferably have worked with, the subject in question. But I’m not talking about typical job candidate references. Who in their right mind would provide a bad reference? Rather I’m referring to a blind reference – someone who knows the person or business in question but is not provided to you as a reference. Unfortunately LinkedIn has bollixed up my practice of finding blind references, as it can be very hard to find blind references on people with an excess of 500 LinkedIn connections. But the real problem with LinkedIn is there is no way to measure the strength of the link, as Google does, by measuring the strengths of links to and from the target – the PageRank. However, all is not lost. You still may be able to find former classmates, investors, fellow workers or even neighbors who know your subject, but haven’t been put forth as references.

The second way to perform due diligence is through research. If LinkedIn shows connections that you share with your target you can communicate with them directly to try to find out how much you should trust the subject, in other words, how reliable and truthful they are.  Of course, checking the candidate’s web site, blog or social media posts can also be helpful. And finally, you would be surprised what a Google search can provide, assuming you can enter a unique search phrase for your subject. Let’s hope it isn’t named John Smith or Acme Corp!

Testing

If we go back to our handy online dictionary, test is defined as a procedure intended to establish the quality, performance, or reliability of something, especially before it is taken into widespread use. For our purposes I would modify that definition to say A procedure intended to establish the quality, performance, or reliability of someone before we decide to trust them. It can be difficult to test everyone you plan enter into a business relationship with. For example, they may be very senior to you and take umbrage at being tested. Or they may have been referred by someone you do trust and testing them may cause your friend to take umbrage. In fact, the basic problem with overtly testing people is that it can cause your subject or others to take offense. Taking offense doesn’t build trust! But I have found at least two ways to test those who may be offended: traveling and playing a sport. Both activities can test a subject’s tolerance for failure, their manners or lack thereof, their competitiveness, patience, persistence, and other important character traits. Travel and playing sports, at least golf, are embedded in business and it’s the rare candidate who would take offense at being asked to play a sport with you. Setting up a trip may be somewhat more difficult, but it can be worth it for an important subject, like a key hire.

I also believe in testing prospective partners. I usually ask them to do a simple task by a fixed date, such as provide me a document relevant to my business or to connect me with someone in their organization. The task doesn’t matter, but it has to be non-trivial and something that can’t be outsourced. You would be surprised by the number of eager partners who can’t meet an agreed upon date for completion of such a task and who offer weak excuses for their inability to do so. Ideally your test should result in something of value to you in the business discussion, like a sample contract.

I highly recommend founders read the entire WSJ article and be on the lookout for other articles about trust. Trust is an important building block in any venture. Trust me on that!

 

 

 

 

 

Keep your eye on your unit economics!

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Unit economics are the direct revenues and costs on a per unit basis. For a consumer Internet company the unit is a user.

CAC – Cost of Customer Acquisition – what does it cost you to acquire a customer?

Repeat Rate – how often to your customers come back i.e. to your web site or your app?

LTV – Lifetime Value – how much will a customer spend over the total time they use your product or service?

For a raw startup all three metrics are pure projections, which are rarely worth the bits it takes to present them. But once your product has launched and you have developed sales traction, you need to keep track of these numbers, as they are the key to scaling. For early stage companies CAC will always be high as a percentage of operating expenses. The objective is to drive this number down over time through economies of scale and more efficient marketing.

Conversely you want to drive the Repeat Rate up. If customers only come to your ecommerce site once a quarter, unless you are selling something very expensive, the LTV, Lifetime Value will be too low. In other words if the CAC exceeds the LTV you have a money losing venture!

As your company goes from raw startup to product launch to revenue generation to break-even these unit economics should all be improving: CAC should be going down, Repeat Rate going up, and LTV going up. Investors will study these numbers, along with your financial assumptions, when deciding whether or not to invest in your company. You will want to provide them with a graph of unit economics on a monthly basis, along with other metrics such as total revenue, gross margin, and operating costs.

While the customer represents a unit for a consumer internet company, the staff member can represent a unit of operating costs, as salaries and benefits are the number one cost in high tech companies. The simplest ratio is company revenue divided by headcount. This ratio needs to increase as you scale and increase efficiency of operations. A mature software company should have a number in the range of mid six figures per employee. However, the current use of large numbers of contractors by many tech companies has driven the typical ratio of revenue to number of full time employees far higher than in the past.

 

 

Options for enterprise business models & pricing

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Amongst the most common questions I get as a mentor are “What should my business model  be?” and “How do I price my product?”

B2B business models have been changing over the decades I’ve been in the technology business. In the very early days I remember the many struggles over how to deal with enterprises: volume discounts? Site licenses? Perpetual or time-limited licenses? Then came LANs (Local area networks) and more questions: license by the seat? by the number of users? By the number of simultaneous users? Microsoft and others solved these problems, only to have the arrival of the Internet and the Cloud disrupt business models and pricing yet again.

Today many SaaS companies rely on a subscription model which has many advantages, the biggest being predictable, recurring revenue. And the pricing model is often $XXXX per month but only ~85% of 12 months if purchased in advance. This is a win-win situation in which the customer gets a substantial discount and the startup gets terrific cash flow. While you can’t recognize revenue on your income statement until the service is delivered that really isn’t important, it’s payment in advance that helps growing companies with insatiable appetites for cash.

But today B2B business models have changed yet again as the article on ZDNet points out: Enterprise software vendors mix and match monetization models: What happens when subscription, usage and licensing converge? N.B. the sub-title: Enterprise software vendors are subscription happy, but they’re delving into usage plans for customers too. Toss in some perpetual licenses and your negotiations with strategic vendors are about to get more complicated.

According to a report by Flexera, enterprise software vendors are employing a variety of monetization models:

Flexera found that enterprise software vendors are using subscription models for 74% of their products compared to 64% using perpetual licenses and 59% following usage-based models. Forty-seven percent of vendors are using outcome and value-based models. Flexera surveyed 321 software suppliers.

The eternal challenge for software vendors is aligning price with value. This is particularly difficult for startups who have yet to establish the market value of their offering. The best approach for startups is to use the real estate model: look for comps. Comps are comparable offerings. But by all means avoid trying to undercut established vendors on price, as you risk getting into price war with cash-rich incumbents like Microsoft and Salesforce, who can drop their prices and put you out of business.

While the article’s many charts on various deployments of different business models and projections on how they will change over the next three years are valuable it skips quite lightly over a concomitant and perennial problem for software vendors: how to enable prospective customers to try before they buy? Options range from time-limited copies to the freemium model.

My advice to founders is to offer a very simple evaluation model and freemium fits the bill. It provides a zero friction option for prospects to evaluate the basic value of your offering while at the same time offering a strong incentive for customers to upgrade to the full product once they are comfortable adopting it widely. One well-known and successful freemium model is Slack. Slack enables users to try out Slack for an unlimited amount of time and then offers three pricing options, Standard, Plus, and Enterprise Grid with the latter being “For extra large businesses or those in regulated industries.” The action item for the latter being “Contact Sales”!

While once software vendors hid their pricing models behind “Contact Sales” today a startup can learn a great deal simply by searching the web for pricing models of comparable enterprise vendors. However, be aware that the freemium model can get very complicated with Slack having over two dozen features that vary by its four pricing tiers.  You will spend a lot of time arguing about what features should go into the freemium version and what type of upgrade paths you offer.

For startups I have three words of advice: Keep it simple. Economic decision makers can’t be bothered wading through pages of options for a brand new product. Make clear that whatever your model, it applies to version 1.0 only and keep any license agreements to one year. That way as you learn your market and better understand how customers value your product you have the flexibility to make changes with version 2.0.

I would strongly encourage founders to avail themselves of the experience of a freelance CFO with extensive experience in B2B software firms. They can help you craft a business model and pricing scheme that will be attractive to customers and will benefit your cash flow. And talk with your peers about their models as well. As usual, market research involves primary research, talking to customers, competitors, analysts and consultants, and secondary market research, scanning the web for research from firms like Flexera and comps from companies like Slack.

Here are the principles I advise you stand by:

  1. Keep your business model and pricing simple! Leave complex hybrid pricing models to the established vendors.
  2. Do not compete on price.
  3. Don’t box yourself in with long term deals.
  4. Get help from advisors and consultants.
  5. Invest your time in learning the market.
  6. Sell based on your customer value proposition, not your business model or price.
  7. Focus your innovation on your product, not how you sell or price it.

 

Email best practices

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I’ve been using email since 1980. At the time I was taught two things about using email: one, don’t put anything in email that you wouldn’t want to see on the front page of The New York Times (unfortunately innumerable people haven’t followed this best practice), and two, respond in no more than 24 hours – if only to acknowledge that you received the email.

I’ve tried to pass these best practices, and a few others, such as how to title email attachments, to my teams.

So I was pleased to see that I’m not only executive who believes in being responsive to emails. Here’s the snippet from The Wall Street Journal article How Take-Two’s CEO Powered Up, sub-titled Strauss Zelnick sought advice from a series of high-profile mentors in his quest to conquer the worlds of media, entertainment and videogames.

Mr. Zelnick says he has adopted a number of best practices from Barry Diller, Chairman of IAC/InterActiveOne example: “Respond to everyone, always within 24 hours,” Mr. Zelnick says. “It’s courteous and you never know where opportunities are going to come from.”

Mr. Diller was probably speaking not just of email, but of phone calls, faxes (!), and other forms of business communications as well.