October 2005 Archives

Over the last couple of months I have been reading some really good books (I try to fit my reading in between work, school, church, and now soccer…so it does take me a couple of months). One of which I have mentioned before, The Experience Economy, in regards to the customer’s experience. But, how to create this experience is something that everyone has trouble with. At least when starting.

What I love about this book is its ability to relate business ideas (some of which many of us have not had formal training) to theater. What are some equivalents?

• Theater = Work
• Stage = Business
• Actors = Employees
• Audience = Customers (or vendors)
• Performance = Customer Interaction

I want to focus on the types of performances today.

Their are four types of theatre that all have their place in the business world:

1. platform theatre: this is the traditional theatre that most people think about as a staged performance, where the script doesn’t vary, and the performance is done in front of an audience which has little of no input into the performance this type of theatre is used in company presentations, advertisements, etc.

2. street theatre: In street theatre, which has traditionally been the domain of jugglers, mimes, clowns, etc. the script is stable but the audience is dynamic. This type of theatre should be considered for public meetings, staff presentations, product launches, etc.

3. matching theatre: “Matching theatre, exemplified by film and television, requires the integration of work outcomes from one disconnected time frame to another. The end product results from piecing together distinct portions of work, performed at different times and often in different places, into a unified whole. The producers of matching theatre must concern themselves not only with the quantity of material lying “on the cutting room floor” but with the alignment of all those pieces, the way they should be linked together to complete the entire performance.

4. improv theatre: that is, the process of “winging it”, which demands certain skills in terms of thinking on one’s feet, responding to new and changing demands from the ‘audience’ etc. this type of theatre can be useful in a company context in terms of creative thinking , telephone interviews and solicitations, etc.

Consider how you are “Acting” today? Need to make any changes?

So, our very own Charles wrote a few days ago about the business ‘chicken or egg’ type story, the Brand vs. Business, especially is regards to the Web 2.0 talk that is going around. But, what about something outside of the Web? Check out this line from Brand Autopsy’s view on a brand vs. business flop.

The lesson I learned….you cannot create a brand before you create a business. The business creates a brand. The brand should never create the business.

So, what happens to those who do? Read up on this sad, sad Song and you will see how fast you can go from flying high to out of business and closing the doors. And to be honest, I had never heard of Song airlines until 2 months ago when I saw them on the tarmac at JFK. They never were big enough to fly to San Diego (or Prague for that matter). I’ll have to admit….Song sure does have a nice logo and brand. Too bad it’s stuck on the tarmac.

So, what does this have to do with the one man shops in the Web 2.0 group? You may not be Harvard material, or junior college material, but if you want to stay in business the bare minimum you have to do: put the business before the brand. The group that was in charge of Song was not a bunch of schleps from Jersey (no offense to Jersey specifically…I just had to pick a state). Delta, the owners of Song, was created by well educated business personnel, more MBAs than they can shake a stick at, and have been in business for a long time. If they forgot the simple idea of business before brand, don’t you think you should listen to their mistake?

Rampant speculation today on the web that Microsoft is about to announce a Web-based Office suite.

Speaking as someone who spent four years developing word processors I can say with some authority that it will be many many many years before Microsoft could ever hope to produce an Ajax-ed Web-browser based office product.

For one thing, Microsoft has MS Office and people will expect any new office product from Microsoft to do all the same stuff. Stuff that took Microsoft nearly 20 years to get into Office. People would expect this of any Office replacement, but they will especially expect it from Microsoft. It will take many years to build such a beast, no matter how many people you throw at it. Until everything is there, no one will be happy with it.

Then there is the issue of the current Office suite. Microsoft has invested a lot of money in this software. It makes up something like 40% of their current revenue. There is no way they will cannibalize that, so to do a hosted office they are going to have to do it some way that does not kill their current sales.

I think its more likely that Microsoft will announce their SharePoint server will be available hosted and maybe some other new tools. But for the most part Office will still be same old desktop-app Office that we know and love, though MS may move more and more parts into their “hosted” service overtime.

Scott Maxwell, a VC who typically invests in expansion stage companies has just started a blog called Now What?. Only his third post and he has already hit a high-note with his comments on Funnel Economics:

Funnel Economics is essentially how much money do you spend on the funnel (in the form of sales and marketing expenses) vs. how much money (in the form of Gross Profit) drops out of the funnel? In this sense, Sales and Marketing is a money machine (remember that magic trick where you put a dollar in, turned the handle, and you got $10 out?) when done right (and a money sink when done poorly). from Funnel Economics-an Introduction

A few days ago Peter and Chris and I were talking about our accounting system and how hard it is to device good accounting for software businesses. In business school we talk a lot about variable and fixed costs, break even analysis, and other techniques developed over the years to help manage production-oriented businesses. But in a software business like ours there really are very few “variable” or “fixed” costs in the traditional sense.

To me, a software company has a certain set of expenses that are roughly fixed for a given number of users. This includes things like hosting costs, support, development, and overhead. Then you have your cost of sales—what you spend to acquire and retain your customers.

Your cost of sales is the money you spend on your sales funnel. You put money in to attract and close customers. The real trick is to get your sales funnel working so that you can put some money into it and have enough coming out of the bottom to cover both your cost of sales and overhead. That’s Funnel Economics. I would call it a Business Model.

Scott says you probably don’t need to think about these economics too much until you have a product or some customers. I think its worth at least taking a guess on how you expect your sales funnel to work when you first get started so you have some idea of whether your business will ever be able to turn a profit.

It’s also important to think about your funnel from the beginning because it will help you focus on what’s most important for a business in the end, which, as Scott points out, is tuning your funnel to turn a profit.

Anyway, Scott’s blog looks really promising. If he continues with these kinds of insightful postings, it will definitely be worth your time. Take a look

Paul Scrivens says:

A major problem with this phase of the web that many people seem to miss isn’t that companies don’t have a business model, it’s that they aren’t doing a great job of communicating their message and their qualities to users. Look at the survivors from the last boom and what separated them from the rest of the field. (from The Brand)

Overall, this is a great read on branding. His basic point is that having a brand means having a focused, consistent message. But I think Paul’s got the place of a brand in the overall business all wrong here.

Sure Amazon, ebay, Google all have strong brands but so did Pets.com. But Pets.com did not have the business model right. They had a clear message reaching out to a defined group: people who needed pet supplies but hated going to the store. Unfortunately, there weren’t enough people with that need and a willingness to buy online to cover their high overhead costs.

Business model. Before you build a brand, you need a business model. You need to know who your customer is, why they will buy from you, how you will reach them, how you will retain them, and what it will cost you to do all of this. And you need to plug all of this into your revenue – expenses = profit equation to make sure it comes out greater than 0.

Branding is a part of reach and retention of customers. It’s a piece. A very important piece, but just a piece. There are lots of other pieces as well, like distribution. Everyone thinks that distribution is not an issue anymore on the web, but that’s not true. Distribution, in its most generic form means delivering your product to your customers. You may put your service on the web and think you’re done, but you’re only half way there. You still have to get your customers to come to your site. That’s the other half of distribution and if you can’t get that right, you’re business will fail.

So Paul says the biggest problem with many of the new “Web 2.0” (or “dot oh” as Richard MacManus calls it) companies is that they don’t have a clear consistent message about what makes them different—they don’t have a brand. I totally agree but I think it is because they haven’t really figured out their business model in the first place. If they had, they would know their audience and their message and the branding part would come almost naturally.

So my advice is: if you want to build a good brand, figure out your business model first. Know who you are selling to and what will set you apart. From there the rest of the branding will flow quite naturally.

Scott Adams, creator of Dilbert is doing a blog. When you tire of reading about Web 2.0, cats, or Google’s latest plans for world domination, its nice to see some well written humor in the mix.

Check out Dilbert Blog

I am getting so fed up with the fact that about 90 percent of the business media focuses on Fortune 500 companies, when most business in America is small business. You would think the media would catch on that they are missing the biggest part of the business audience.

While I do believe that Sproutit.com is a a Web 2.0 company, I also agree with Jeff Clavier in his recent posting:

Let’s just say that Web 2.0 is useful term to represent this current generation of Internet companies, and get on with it: building sustainable companies….So how about we stop arguing and go build great companies.

We have blogged enough about the definitions of Web 2.0 and whether we are creating Bubble 2.0, however, one thing remains. We are a business. And every business has driving influences. We have three driving influences.

1. Turning a profit; why else would we start a business?
2. Serving our customers to the best of our abilities.
3. Changing the world, one person at a time.

Do that, and you will be around far beyond Web 2.0.

Great insight from Venture Chronicles:

a wise investor once told that companies are not sold but rather that they are bought, and I’ve layered onto that subtle but significant comment my own observation that companies only get bought when they are executing on their business plan and are a threat/opportunity to a potential acquirer. (from Built To Be Bought – Bubble 2.0)

Following up my earlier assertion that economics makes Web 2.0 different, here are a few examples.

The companies that survived the first bubble-Amazon, Ebay, Google, and Yahoo-all have similar business models: they all took years of extended losses to build up the large numbers of users and economies of scale needed to turn a profit. Their business model works for sure, but the number of markets with enough motivated users to reach the scale required for this kind of model is very limited.

Now, thanks to a new economic model powered by a dramatically lower cost of technology and a new willingness by customers to pay for services, a new business model is possible. In my opinion Basecamp was the real proving ground for this new model. With just over 10,000 users, the company was profitable.

I posted this graph earlier but it’s so good, I’m going to include it again:

The real lasting value in Web 2.0 is not technology, its economics.

And this leads me to my other prediction: the companies that survived the first bubble were business plays more than they were technology plays. The same will be true for Web 2.0. Google, Amazon, Ebay…they are all fantastic but none were the first to bring search, books or online auctions to the web. Likewise, the majority of the long term successes to emerge from this 2.0 era will be business plays. Not the first the ones to use things like tagging and Ajax, but the ones who use these technologies to tap into new markets.

This is one the main reasons why I argue there is not yet a Bubble 2.0. There are not enough MBAs involved yet. First MBA entrepreneurs have to flood the market with thousands of business plans that will test out the boundaries of this new supply and demand curve. Then Wall Street and San Hill Road needs to get involved—again, more MBAs. They have to place their bets and start hoping for a bigger fool to come along to get them out. Then the casual investor can get involved. Once we get through all of these people and there are no more buyers left, the bubble will pop.

Right now its mostly only tech-savvy people that get it. Most of the companies launching today are exploring technologies (most of the same technologies actually), not business models. And VCs are clearly still looking at businesses for their merits and not just a quick flip. No, the MBA’s have not yet come in force. We have a long way to go yet before this Bubble 2.0 thing has run its course.

gapingvoid says the best advertising is not word of mouth. The best advertising is disrupting markets. This seems like a riff on Seth Godin’s idea to be remarkable. The best quote from this post:

No, actually, you moron, people don’t want to talk about frickin’ Starbuck’s coffee goodness. People want to talk about wifi. So give them good wifi and you will be mentioned in conversation.their conversation. Don’t try to change the conversation, try to improve the one they’re already having.

If marketing is about being a part of your customers’ conversations then you have two choices: try to start a new conversation that involves you or join one they are already having. Two guesses which one is easier to do…

When was the last time you were fanatical about anything? How do you take an unknown brand to No. 1 in 5 years or less? Elizabeth Esfahani, of Business 2.0 reveals an amazing story of the little yellow packet of success.

...Splenda, a sweetener that customers have been clamoring for since shortly after it hit the market five years ago…. It’s hard to believe that consumers could be fanatical about an artificial sweetener.

But how did they do it? According to Asfahani’s post of Finding the Sweet Spot, she attributes Splenda’s success to building buzz.

Starting small but attacking the market on many fronts. To build buzz, [Splenda] rolled out the product gradually…the company persuaded niche food and beverage makers…to use Splenda as an ingredient before going after high-profile brands.

A key note in this is that they started small, like we all do, and they focused their efforts on niche market segments. All the while thinking big. Very big. In fact, their plans are not to be known as just a low-calorie sweetner, but as a replacement to sugar. Do you question the feasibility of that? I did. Until I read the hard evidence.

Splenda’s revenues recently passed those of top sugar brands….and during the past year, its $187 million in retail sales have bested Equal’s ($57 million) and Sweet’N Low’s ($51 million) combined.

So, how big should you think? Where many of us would stop at being No.1 amongst our direct competition, Debra Sandler, Splenda’s marketing chief, has plans that go beyond that. Way beyond. “I [Sandler] am looking for iconic status.”

So, the plan?

• Start small
• Target niche markets segments
• Create buzz among your niche customers
• Develop relationships among larger market segments
• Think Big – no market is too small
• Act Big – keep you customers clamoring for you
• Dominate – Don’t stop until you are No.1
• Become an Icon

So apparently at the Web 2.0 conference O’Reilly hosted a few weeks ago, there was a lot of talk about whether Web 2.0 is a bubble.

I think its not possible for Web 2.0 to become a bubble just yet. There are just too many people out there who remember the first dot.com bomb and are loathe to repeat it. There are still a a lot of VC’s, such as Ed Sim who care about business models. And there are a lot of other people already annoyed with the whole idea of Web 2.0 such as Black Rim Glasses and Joel Splosky.

For a bubble to form, you need massive irrational exuberance so overwhelming that any critics will be silenced or drowned out. But its not that way. Web 2.0 is still not in the general lexicon and the critics still have a voice. At least for now.

That brings me to the question of this whole Web 2.0 idea in the first place. Is this just another hype term that will plague the technology industry for a few months/years and then dissipate? Or is it something more significant? I’m not usually one to follow the crowd so if Web 2.0 is just some hype thing, I don’t think I want to be associated it.

Over the last few years, the economics of web applications has fundamentally changed. It has become much cheaper to build web applications and consumers have shown an increasing willingness to pay for online web apps. The supply curve for web apps has shifted down while the demand curve has shifted up. Suddenly a whole new range of business models that were not practical before will now work.

This is important! As an entrepreneur or investor its important because its in these new uncharted territories that there is money to be made. Its important for technologists, journalists, and everyone else because new, ground breaking companies are going to come from this new frontier as well. It is so important, in my opinion, that it is worthy of a name. Which is why I use “Web 2.0”.

I know, a lot of people out there mean different things when they say Web 2.0. Its nebulous. But in the end, everyone agrees that the term refers to something big that has changed in the world of online web apps. From my perspective its the economics of the thing. And if this idea has any long term impact, it will be these new economics that make all the difference.

PS. Lest you think I’m saying that the old rules of business don’t matter anymore, please see my post Web 2.0: Business Model Still Required

Every business needs a purpose. 37signals purpose is to sell simple. Our purpose is to bring the software that powers big companies to small business.

Your purpose can have a huge impact on the decisions you make. It helps to make sure that everything you do lines up. What is your business’ purpose?

I ordered some RAM for our Mac mini and it came in today. It was fast and a good deal for the Czech. I took our mini with us just in case they would install it for me. (mini’s are really nice but they require a putty knife to open). I pointed the RAM at the mini and asked “put in?” the tech held up a finger and said, “Minuta.” Well it took him 3 minutas (not proper Czech) and he was done. No charge.

The best part was not that I avoided buying a putty knife to install the RAM. The best part was I didn’t feel alone in the cold world, left to fend for myself. Somebody was there to make sure I didn’t screw up my Mac.

The problem is valuable resources are needed to take care of customers but consumers often are more concerned with low cost. Charles explains this in his article on one of our old blogs Why Are Big Business So Mean.

This is where small business needs to differentiate. We need to give a warm personal touch behind our products so that people know there is a person ready take care of them. People remember those interactions because most appreciate hard work and good service.

So thank you MaxiMac for your hard work and good service.

Elizabeth Millard of CRM DAILY.com comments how small business should still tap into the power of CRM applications. Sproutit.com stands by the power of CRM to stay connected with your customers, if even for a moment.

Hosted CRM applications are another compelling option for small businesses because they allow small companies to tap in to CRM capabilities without having to suffer the expense of buying software outright.

Elizabeth Millard of CRM DAILY.com comments how small business should still tap into the power of CRM applications. Sproutit.com stands by the power of CRM to stay connected with your customers, if even for a moment.

Hosted CRM applications are another compelling option for small businesses because they allow small companies to tap in to CRM capabilities without having to suffer the expense of buying software outright.

Elizabeth Millard of CRM DAILY.com comments how small business should still tap into the power of CRM applications. Sproutit.com stands by the power of CRM to stay connected with your customers, if even for a moment.

Hosted CRM applications are another compelling option for small businesses because they allow small companies to tap in to CRM capabilities without having to suffer the expense of buying software outright.

Elizabeth Millard of CRM DAILY.com comments how small business should still tap into the power of CRM applications. Sproutit.com stands by the power of CRM to stay connected with your customers, if even for a moment.

Hosted CRM applications are another compelling option for small businesses because they allow small companies to tap in to CRM capabilities without having to suffer the expense of buying software outright.

We spent a lot of time working on this today, so I thought I might was well use it more than once:

Sproutit is creating a whole new type of business software designed for the unique needs of businesses with 10 employees or less. Our first product, Mailroom, is an email management system for small business. It sorts, prioritizes, and even suggests replies with little setup and no training.

Ed Sims at BeyondVC says:

So if you are an entrepreneur, stop talking about Web 2.0 and start talking about how you are going to scale your business and make money. (from BeyondVC: Web 2.0 Bubble)

We’ve been talking a lot about this new Web 2.0 thing lately. But Ed Sims at BeyondVC makes a good point: there are certain timeless elements that make new ventures successful, no matter what technology you are using. For example, before you go start a new company based on your Web 2.0 idea, I think everyone needs to identify:

• a group of people who want something and are willing to pay money to get it;
• a product or service that will meet that need;
• a way to tell that group of people about your product or service;
• a way to deliver it to them;

And after you do all that, you still need to have some money left over for profits.

It’s called a business model, and I’m sure everyone reading this blog knows about it, but I’m surprised at how many Web 2.0 companies seem to be launching without one. Some are even getting funded.

From the Associated Press:

America Online is laying off more than 700 employees, primarily in member-services call centers, in response to the ongoing decline in subscribers for its dial-up Internet-access services. Under the plan, the Time Warner Inc. unit is closing its center in Orlando, Fla., and is cutting positions in centers in Jacksonville, Fla., and Tucson, Ariz., and at AOL’s corporate headquarters in Dulles, Va. The cuts amount to about 4 percent of AOL’s 20,000 global work force. The company hasn’t announced layoffs of this magnitude since December 2004.

If you are one of the 700 who got AOL pink slips today, the story above is probably nothing but bad news to you. But to me, it’s a sign that the small business revolution is still churning forward.

Out of the 700 former AOL-ers, most will probably aim to move on to work for other large companies. But there probably aren’t enough big company jobs to absorb all of the newly out-of-work, so many could find themselves turning into accidental entrepreneurs.

That’s pretty much what happened to me three years ago when I started SA Stewart Communications. Up until that moment, I had never had the ambition to work for myself. My parents were in business for themselves and I saw how hard they worked. But even worse, I saw how my folks could never really compete against bigger companies with bigger resources.

That’s changing now, thanks to companies like Sproutit.com, where the mission is to level the playing field so small companies have a better chance of growing to become big ones. Five years from now, we’ll probably hear of a prominent company that got its start when the founder was laid off from the AOL call center.

Richard MacManus asks Where are the disruptive start-ups?

I also don’t see many start-ups attempting disruptive things in the non-geek space. I see plenty of events web apps, tons of RSS Aggregators, lots of AJAX-powered office apps. But what about Web 2.0 applications that will tackle things like health, finance, education, government?

We have already established that Sproutit.com is a Web 2.0 company, but are we disruptive? I think so.

Sproutit.com exists to bring business software to very small businesses, nearly 20,000,000 of them in the US alone. Very little software exists for this group of people because their needs are so very different.

Most companies in the past start by creating software for big enterprise. Their software is complex and requires extensive customization, setup, and training to make it useful. It is also sold by a force of direct salespeople that work off commission so it is big and expensive as well.

Very small businesses have completely different needs. They are like consumers. They want software that is simple and instant. Software that they can use right away with little setup and no training. They want it cheap with no up front capital outlay and they never, ever, want to hear from a salesperson.

Very small business’ needs are different and we are build the business software to reach them.

We are building business software to reach a whole new class of people. Currently, most people in this group simply do without. Its the very definition of a disruptive startup.

So is Sproutit.com a disruptive startup? I think so. Will we become the next Sun or Netscape, like Richard is looking for? Honestly, I’m not even thinking about that, but I do hope that at least we make an impact on how small businesses are run in the future.

If you want to find out more about Sproutit.com, read our story

Robin Miller writes three reasons why Internet-based applications are a bad idea, which is really just one reason with three example. His problem: network-based applications require a network, and network access can go down.

I’ve thought about this issue a lot recently since we moved to Prague and were faced with the task of running an internet business with no internet connection in our home.

Clearly one of the biggest challenges with web-based apps is the reliability of the internet. But internet connections are getting more reliable everyday. For the many people using web-based apps, the connections are already good enough to take advantage of these new useful applications. For others it will take longer. That’s normal. It’s called the adoption curve.

Technorati Profile

The venerable Jakob Nielsen (who seems to be on a mission to convince us all that usability does not require attrative design) has published his list of the top ten design mistakes bloggers make. There are all great points. We violate a few of them here, but they are on my list of things to improve when we get our new website up.

Jakob Nielsen’s Weblog Top Ten Design Mistakes

According to a recent post by Marketing VOX,

...56 percent of the domestic internet population – viewed a streaming video online in June 2005…

Is this the lost marketing tool that you haven’t pulled out of the bag? With 94 million Americans alone streaming everyday, can you afford not to?

The new book Hacking Gmail by Ben Hammersley includes lots of tips and tricks on how to use Gmail for backup, as a Feed reader and more, all integrated of course with Google’s search technology. Among the tips our very own Choonkeat’s Rssfwd:

Using Gmail to find information in RSS feeds. Done by using an RSS-to-e-mail service like RSSFWD, and using the address+label combo above to store the feeds. After they’re saved, it’s just a simple search using Gmail’s built-in one. (from teknolohiya: Gmail Hacks)

Way to go Choonkeat!

Markpasc talks about what every web 2.0 company should have. We get two mentions, so I guess we’re doing pretty well. ;-)

After waking from a terrific slumber, I find myself in front of the stove cooking an omelette and sipping on some juice. There was no hurry today. Not this morning. Why? Because we can wake up to internet.

I am sure you think we are going a bit overboard telling you how great it is to have internet, but just imagine….

1) searching for an internet cafe that has WiFi

2) paying for every minute

3) having to purchase a drink or food, even if you don’t want it

4) having to stop because the cafe is closing

5) not being able to check the movie listings on a moments notice

6) not map program to help me get anywhere

I am sure we could continue this list for days, but oh, how sweet it is to have internet for breakfast.

After six grueling weeks of daily treks to internet cafes, we finally have DSL in our house. Oh, its like getting my fix.

(PS. First blog post from our house, guys. I rule.)

So, as I was walking around our neighborhood this morning and happen to run across a little hole-in-the-wall pension. But best of all,...it has internet and a little cafe inside.

This whole time we have been scrambling around town to go to internet cafes when there is a much closer option here. We just failed to see it. Guess we had our WiFi, cup of espresso, American-style internet cafe blinders on. And it had the lovely European Mist.

No matter what restaurant, cafe, office building you choose to walk into here in Europe, you will always see a thin layer of white in the air above you. We have deemed it the European mist. I am sure I could throw out a few ideas of what it is made from, but I’ll leave that up to your imagination….

We just wanted to say congratulations to Chris McCormick for winning the 4th annual PLNU Monopoly Tournament sponsored by Sproutit.

Way to go Chris!

While discussing Web 2.0, Dave from Thebarproject makes this comment:

There is a huge movement behind the marriage of design, simplicity, and functionality

I agree with Dave and believe the key words are simplicity and functionality. Crippled big business software as well as fun little apps that only solve a piece of the problem only gets us as far as frustration. What we need to start building for the small business community are tools that solve specific problems completely.

I’m personally excited to see the potential of the new ideas and technologies coming from the Web 2.0 movement. Behind the mantra of simplicity and functionality we can expect to see more applications that allow the other 20 million business to offer service and support typically reserved for larger firms.

We are getting very close to kicking off our pre-launch push. In the meantime, just for those of you who read this blog, here’s some info on what we working on:

Sproutit In a Nutshell

More in the coming days.

Small Business Trends says that more than half of small businesses do not have accounting software. According to the study, most of the businesses without software were in the 1-4 employee category. Why do you think that is? From the study:

More than ever before, SBs are searching for solutions that are easy to install, user-friendly and, most importantly, tailored specifically to their size.

This is exactly why we started Sproutit.com. Lots of software is available to help big companies run their business, but very little is available for the small business.

More than that, small businesses are different. They have different needs. Companies like Oracle have tried to sell slimmed down versions of their big company software. But small companies don’t want crippled software, they want software designed for their unique needs; software that is instantly easy to use without training or configuration; software that fits their cash flow; software that’s useful without a consulting contract to go along with it.

From the Third Wave:

The customer will become so integrated into the production process that we find it . . . difficult to tell . . . who is the producer.

Isn’t that the very definition of Web 2.0?

There has been a lot of talk this week about Web 2.0. I will leave the dissection of what this word really means to greater minds. What interests me the most is the potential impact Web 2.0 apps may have on society at large. Could this be the catalyst to bring about age of the prosumer?

He write’s em, we mirror ‘em. Seth Godin has released his third free ebook in the last few months. This one is called Everyone is an Expert and you can get it here:

Download Everyone is an Expert by Seth Godin

Also, check out Seth’s interesting new biz Squidoo. Here is Seth’s summary, why not try the beta?

I’m excited enough about this idea that I’ve spent the last 5 months assembling a team that is building a platform called Squidoo. My goals? To raise a lot of money for the charities of your choice (or for you) at the same time we make it easier for you to spread your ideas. And to do both of those things while making it easier for people to find what they’re looking for online.

Speaking of doing things right: we had lunch today at a place called Cafe Imperial. They have a huge bowl of day-old donuts available for sale. It sits on their bar and you can buy it for only $80.

Why would anyone pay so much for day old donuts? Well, because along with the bowl of donuts, your money also buys you the right to throw them…at anyone…whether you know them or not. Would you pay $80 to start a food fight in a 100 year old cafe?

People want to buy products or services that are done right. No cut corners. No shortcuts.

Attention to detail has value. People notice when you plan, they notice when you spend the time and money it takes to get things just right. It pays off. It’s the foundation of all brands that create passion.

But you already knew that. We all do. Yet most small businesses take shortcuts here and there anyway. “I just don’t have the time to do everything right”, we say to ourselves. Or maybe its money or resources, but we all say it.

It’s true that small businesses have less resources, but nonetheless I think you can do things the right way anyway. We have the tools and technology today to make it happen. You just have to make it your priority. It’s a challenge. Probably the biggest challenge. But you can run a small business and still do things right.

In fact, that is why we founded Sproutit.com. We wanted to build a business that did thing right, even when it was small. And we wanted to help other small businesses do things right too. It’s our passion. Our new software is about email, but it is really be about doing things right.

From Business Logs:

A blog can be an important tool for a business, to be sure. But the vast majority of the web-wielding public doesn’t care about blogging. They may get a bit excited that they can leave feedback right on the web site, but as one person explained to me, “Why would I want other people to see what I have to say to that company?” (from Closing the Blog, Opening the Conversation)

Blogs are a great way to communicate directly with customers, but there are a lot of people who do not and perhaps will never understand the total concept of a blog, a lesson I learned earlier this year trying to get my family to read m okito.net blog where I post my pictures from Prague.

This is one of the biggest reasons I think every blog should use Rssfwd on their site also. Most of your readers don’t understand blogs and they definitely don’t do RSS. But you can make our blog do double time by reaching these folks too with e-mail.

This month is Six Apart’s four year anniversary. I just picked up Mena’s blog a few weeks ago and I’ve enjoyed reading a lot of her posts.

If you want an example of a company that is doing things right and growing as a result, Six Apart is a great company to follow. They are today where many of us Web 2.0 start ups would like to be ourselves in a few years. It’s worth taking the time to follow their story.

Sun and Google Expand Technology Reach And Global Opportunity. What a title! Are they changing the world? Maybe taking on Microsoft?

Hardly. Sun is bundling Google’s toolbar. Maybe I have been dealing with authentic people for too long, but this press release is worthy of Dilbert.

Note to self: when you puff up uninteresting news, it only makes the news more uninteresting.

(via TechCrunch)

Bootstrappers. When it comes to the american dream, these guys are the epitome of the do-it-yourselfers. But is this always the best way to do it?

Is taking on investors during development a bad thing to do?

Well, some people allow them selves to be walked on by a seed investor who takes as much as 50%! Even handled right, most seed investors will go for around 15-20%. But what if that is more than you can bear?

Have you ever taken out a loan? Sure you have. But, have you ever issued a loan? Probably not. But think about it. Instead of giving up a chunk of your company, why not give up a few points of interest? But, i know what you are thinking… “debt is bad.” Why? It can help to stabilize your investment in the company by allowing you to work longer and without the worry of releasing a bad product too early just to make a buck. Let’s say you pay $1,000 in interest in the first year while in product development. That seems better than giving up future dividends of 20x that amount.

But that is just me.

Ok I know my views maybe a little skewed because of my accounting back ground but business really is 90% organization. In fact a group of people that get together to do something it is called an organization. Businesses organize money, people, information and all kinds of other types of resources. The most efficient and effective companies are the ones who figure how to organize their organizations.

I could talk days about organizing different aspects of companies and products to help so I’m going to choose just one to illustrate how our current generation of small app developers have missed the boat of providing useful tools.

It is 37signals new “Writeboard” (via TechCrunch Review). Now just to be clear we love Basecamp and use it intensively. That is because it a well thought out application that allows users to enter in information easily and more important find the information quickly.

The thing I don’t like about Writeboard is there is not a good way to organize your pages. You put everything on one page. I don’t want to go blind scrolling through an endless page of web text. The power of the web is we can break things down and organize them through links. I don’t know why hosted wiki apps don’t let me do that.

What I would really like to see is the small app community really take a look at the problems they are trying to solve. Then find a way to simply and truly solve the problem. And for me that means whatever the tool it needs to keep me organized.

The great thing about about a Podcast is that anyone can create one and put it online for the entire world to hear. While we think Podcasting is a great way to get your message out, your listeners can tell immediately if you are truly big or just acting.
Let me give you an example….