Icon A5 Recreational Plane
Forget having a trailer boat when you can have a trailer plane for a little bit more. This is like a car for the sky. No pilot’s license needed.

Flying Hover Craft
Invented by a Kiwi this backyard invention is for sale on Trademe. An average boating trip contains at least an hour of banging around over waves to get to the good spots. Fly there instead!

Tesla Model S
If mainstream car companies won’t step up and produce sexy electric cars they will fail and new companies will create what consumers want. Tesla cars are faster than your average Ferrari, quiet and eco friendly. They are also cheap to run and have great range. Are the large car companies sleeping or what?

Tesla Model S Part 1: A greener automotive future

Tesla Model S Part 2: Pure Electric Power

Gyrocopter
Gyrocopters look like helicopters but are in fact closer to planes because the blades are unpowered. The blades spin due to forward momentum. This makes them safer than a plane at low speeds and allows them to take off in short spaces. For the price of a second car you could fly to your holiday house.

Remote control Fighter Jet
I’ve never really wanted a remote control plane but a remote control fighter jet with real jets gets my nod.

Dolpin Sub
Personal Submarine in the shape of a dolphin.

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I spent some time recently helping companies determine if their ideas would succeed online. I’ve written this blog to document some of it. Hopefully it helps someone out.

Many web businesses start with a fantastic idea. We just know it’s going to work. I use the word ‘we’ because I’ve been there (more than once). We come up with a product then many reasons why the market will love our idea. We may be right that customers would buy our product, if and that’s a big IF we could find a way of telling our market about it.

Often the internet gets used as a magic bullet by people who have not tried to slug it out online. Using the net we can put our product in-front of millions of people right?

In my experience this is not a given. But what I do know is there are ways of testing how large the market is and how commercially viable it may be.

In terms of risk it is unlikely we will fail to build the software/site. It’s more likely we will fail to market the product successfully. So before you start spending money to develop your product or service here are some very simple tips on how to determine how it will fare online.

There are many ways to reach customers online but the most common are:
1. Search Engine Optimisation (SEO) – Get listed in search engines where millions of people are searching for your product
2. Search Engine Marketing (SEM) – Use Google Adwords or similar to advertise your product (paid)

If customers exist for your product or service they will be searching for it in Google. Therefore researching the potential for these two methods of marketing is invaluable.

Most people planning an online business are not aware that selling products and services online is fairly predictable. It’s a funnel which has very predictable points. So you can calculate the end result of months of hard but successful work in a couple of minutes, de-risking your venture.

There are many factors which influence how well customers will flow down this pipe but let’s ignore that and assume you have succeeded in building a great site, have a good product and excellent SEO. Thise following exercise will demonstrate a simple way to determine how successfully you will sell your product online.

In this following example I’ve come up with a great idea. I’m going to sell NZ Bio Oil to a worldwide market I estimate to be a million customers per month. It’s a nice little niche which means I can be targeted in my marketing and I’m making a 30% margin. Sounds like a great idea right?

Step 1. Determining Search Volume

The first step is to determine the size of your online audience. You can do this by using Google Adwords. This tool is targeted at people using Google advertising and shows how many people are searching for specific terms. It also shows how many people are advertising for each keyword, which is a good indication of how difficult and expensive it’s going to be to target these people.

adwords.google.com/select/KeywordToolExternal

Adwords Screen Shot

Open Adwords then enter the exact phrase your customers will search for. You will see a list which includes the Local and Global Search Volumes. The Advertiser Competition bar shows you how many other companies are using Google to compete for your market. This is significant because it will drive the price of advertising up and also means these other companies will be competing against you in the search engine ranks. If you use the Show/hide columns you can also include the Estimated CPC column.

The Estimated CPC figure shows the amount of money you will pay every time someone clicks on a Google advertisement shown in a search for these keywords. Like the Advertiser Competition bar this gives you another view of how expensive this is going to get.

You will generally find a high volume keyword dominates the market but will have high competition. Best practice is to find several smaller keywords which are very specific to your product and use those instead.

So now you know the traffic volume either locally or globally. I now know that 327,000 people are searching for our example product per month. However we are not likely to get in the first page of Google for the broad search term of “Bio Oil” so lets plan around the more specific phrase “Bio Oil 200ml” which yields 27,000 visits monthly.

Step 2. The difficulty of getting on page 1 of Google.

Fighting your way on to page one of Google is not an easy thing. However that is a subject for another article completely. But take my word for it, if you’re not on page one you’re not going to get in the click stream. I’ve been on page two for keywords with massive volume and got at best a couple of clicks a day.

For the purposes of evaluating the market let’s assume the SEO works and you do get to the first page. When this happens you can conservatively assume you will get 10% of the clicks we saw in Adwords.

Step 3. Do the maths for the conversion pipe

So for our fictitious idea of selling NZ Bio Oil to a worldwide market we can work our way through the numbers like this….

Total search market 327,000 unique browsers (ub)
The keyword we think we can successfully target is 27,000 ub per month
If you’re on page one of Google you may get 10% of this traffic which is 2700 visitors
If your web site is well optimized you will convert around 2% of these visits which is 54 paid customers

Note : You may convert a larger number but at this early stage I wouldn’t bet on it. Better to be safe than sorry when considering investing a lot in this business.

Average purchase will be one product ($40) with a 30% margin ($12) 54 times a month = $648 Margin Per Month

Hmmmm $648 a month doesn’t sound too flash to me. As you can see the idea which sounded pretty good didn’t really pan out.

Paid Advertising

The second easy way to reach customers is Google Adwords. You select the keywords you want to target then your adverts are displayed beside the search results we talked about above. The advantage of this approach is you are instantly targeting the keywords from above with no time spent on SEO.

The process is an auction, with companies bidding on the keywords they want. However you only pay when someone clicks on your advertisement.

There are two major downsides. The first is that most keywords are so expensive you will never make money advertising like this. The second downside is that compared to the search results very few people click on these adverts. There are around five advertisements displayed on each search. Together they get around 3% of the clicks.

Also the costs, which are shown in Adwords, are often a lot lower than reality so it’s worth running a few adverts to find the real costs.

Lets run the figures for our Bio Oil example. With a much lower number of people clicking on our advertisement we will have to target the broad keyword “Bio Oil”. Otherwise we simply won’t get enough clicks. In some markets you can advertise using many smaller volume keywords to reduce the cost but we will focus on the main keywords in this example.

Each person who clicks on my advertisement is going to cost $1.35

At a 2% on-site conversion I need 50 visits before I sell something. So it will cost $67.50 to sell one item with a $12 margin. So every time we sell a product we lose $55.50.

It may seem hard to believe but I have seen companies spend a lot of money on Adwords without doing this calculation.

In Summary

So it looks like my idea for selling Bio Oil is a flop. I won’t invest the $15k on a shop and $25k on SEO. I will in fact go back to the drawing board and find something which does work. I might have to run a few ideas through the pipe but when I find one that looks good I have the confidence to take it to the next stage.

Understanding these simple tools allows you to test ideas and will save time and money. I find it also sways my thinking towards marketing based ideas or at very least product ideas which have a unique marketing avenue. These are the ideas you want.

When your research has identified there is a viable market for your product you can test the theory by doing a market test then proceed to invest in the technology with the confidence you have taken as much risk out as possible.

I’ve spent a fair bit of time involved in startups. I love working with passionate people intent on launching ambitious businesses. There are two things startups could be known for, having a huge amount of passion and an inverse chance of success.

These factors almost certainly have a close relationship. People who start tech businesses are generally passionate individuals, they have an idea and they are gunning for it. It is this passion and self belief that drives them to risk income, time and sometimes reputation in their ventures. Unfortunately sometimes passion, self believe and certainty gets in the way of a healthy portion of doubt and some market research.

It always pays to verify your idea as much as you can before you start. But even with all the market research done there is still a reasonable chance of failure. The question is what are you likely to fail at? There are two stages most tech business go through, building the software/site and getting successful customer uptake.

Building software is complex, but lets face it how many companies failed because they couldn’t build the product? A few of course, but most tech startups bomb because they fail to get customers on board. There are many reasons this happens. The most popular being the company fails to successfully market the product, another being that the market is not as hot as originally thought. But history has taught us that even with a good product and good marketing some sites make it and some don’t. There are thousands of failed social media sites and only one Facebook. When you are dealing with customers and the net there is always an element of luck involved.

The classic way to bomb a tech business is to spend a massive amount of time and money on the product then fail in the market. The smartest way to mitigate against this market risk is to flip the process around. Do the product marketing first. It is after all the piece which is more likely to fail.

Instead of spending the majority of your time and money upfront building a product start by proving you have a market. Build the equivalent of a Hollywood set (just a cardboard building front), then move straight into the marketing to see if you can bring anyone to your cardboard door.

How can you market a product or site you don’t have? It’s surprisingly easy, here are some rough examples.

Example 1. SaaS Software

Put up a beta site showing some screen shots of functionality which will be in the final version. Then get customers to sign up to a beta program or to register to find out more. When they sign up send them an email saying either the beta is over subscribed or they are now on the list to get a free version when the software comes out.

Example 2. Web Site

Advertise that your site is coming soon and show some of the content or deals which will be included in the build. Then get people to sign up for a free something, or register to hear when it launches. You can play with this to make it compelling.

I’m sure you get the idea.

Set yourself a target number of visitors. When you hit this target you have done the hard bit and proved there is a market for your product. At this point you can proceed to build it with the confidence that you are about to launch a product/site to a hungry audience.

You may not always be able to fake it so blatantly. A hybrid approach may be necessary where you build something cut down. But what you are creating is the illusive fail fast business.  If you cannot reach your market you have failed quickly and cheaply.

Online Advertising

Another way to test ideas is to try out different online advertising methods. Buy some Google Ads and see how much it will cost to get people to your web site. Then gather stats about how many sign up. You now have the raw data to see if the idea can be supported with online advertising.

Iterate Fast

In a traditional software business the product is developed first. When the product fails to get uptake the product is changed at great expense and the marketing kicks off again. This may happen several times until the product succeeds or more likely the business runs out of money. The brilliant thing is when you fail with a market test you can spend a few hours changing your screen shots, add some more features to your pitch and see if that improves your situation. You may be able to quickly move your product into a receptive audience and succeed.

It may take time to plan how to apply this technique, but it is very powerful and has the ability to save massive amounts of time and money. Enjoy.

Apples new iPhone for 2010?

Posted: December 7, 2009 in Business 2.0

Every year as Macworld draws near the blog-sphere opens up and a veritable deluge of predictions rain forth. I overheard a colleague this week talking up Apple shares and speculating on what direction everyone’s favorite company would turn in 2010.

I did some thinking and decided I would get my predications in for next year. At least if I’m wrong people will have forgotten and I can quietly compromise my credibility by removing this entry on the sly.

So let’s walk through the facts. Life is good at Apple, Steve is back and the company is booming. MAC sales had flattened to 4% in Q3 but in Q4 chalked up a respectable 3 million units which is up 17% from last year.

They sold 7.4 million iPhones in Q4 or 7% growth from last year. To offer a more telling contrast in Q3 they sold 5.2 million iPhones or seven times as much as the previous year. 700% !

Ipod sales however are down, declining consistently around 8% when compared to the previous year. So it looks like people are finally moving away from music devices towards smart phones. iTunes hit 2 Billion downloads some time ago and continues to dominate online music sales, which one can only assume will be the only type of music sales in a couple of years time.

So we can establish that Apple is now becoming a phone company. So what do smart phone companies do after releasing their flag ship model? To substantiate the answer let’s look at two examples, Palm and Blackberry. We all remember what a hit the original half foot wide Blackberry was. The company followed that up by producing a smaller slimmer cousin called the Pearl. This phone made Blackberry a standard issue amongst corporate warriors and wannabees alike. Somehow it even managed to briefly bring back the rush of prestige business people felt when using a car phone during the late 80s. Once again people started putting their phones back on meeting room tables.

So what about Palm? This year they released the beautiful Palm Pre which gives the iPhone a run for its money, at least in the sexiness’ stakes. With 500,000 units sold exceeding expectations it still comes a little short of the 1 million units the iPhone 3GS sold in its first week. With its sexy flag ship in place Palm are making the obvious move by releasing a second webOS device. The smaller Palm Pixi will be available before the end of 2009.

http://www.palm.com/us/products/phones/pixi/index.html#video

My guess is Apple will follow suit. The mobile phone market is notoriously fickle and today’s hot phone is always tomorrow’s brick. The iPhone is the undisputed aspirational product of the year (again) and its success has already affected iPod sales negatively. The local step is to bring out a slimmer, cheaper and more pocket friendly version for generation Y.

To see how this would look, just check out a picture of the iPod range. Now image an iPhone range, one large touch screen like the Blackberry or the Palm Pre, then a smaller unit possibly with buttons like the Pixi or the Pearl. That is my pick for next year’s hot product, check out my hacked photo and let me know if you have any predications.

Horrible Hack

iPhone 2010


Here are some other predications of how it might look.

http://www.gayakuman.com/phone/the-new-concept-of-iphone-3g-nano-designed-by-isamu-sanada/

http://www.ilounge.com/index.php/gallery/category/C87/

In the last week I’ve heard many ‘interesting’ ways to take an average under-motivated team and turn it into one of the illusive High Performance variety. Office furniture, pool tables, team structure, salaries etc. all appear to be important.

I thought I would throw my 10 cents in and describe the tangible elements I have always found in teams that performed better than most.

I apologize for my exclusion of pot plants, natural light and meeting rooms that look like ski lifts.

1. People
Forget trying to change people – it just takes too long. The famous book Good To Great said correctly ”Get the wrong people off the bus and the right people on it as quickly as you can”. If you want your team to perform above average you need better than average people (no brainer, huh).

If you don’t know how to pick or recognise these people make sure you start by hiring a manager in their field who does. I personally always start with the same profile. Youthful, extremely bright people, with a genuine passion for what they are doing. These are the people who won’t let you down, will work on into the night and spend their spare time reading articles online to improve their skills.

Simply put, if you staff your team with these people you can’t go wrong.

2. A clear and exciting mission
You won’t get these people past a first interview unless you have a clearly defined and inspiring mission to offer. They don’t want to be on a losing team and they see their time as an investment which should take them somewhere great. You need to lay out a mission ie.“We’re going to be first to market with a world beating product using cutting edge technology, in 12 months we predict 100% growth etc.”.

If you do it right, good people will be climbing over each other to become part of it.

3. A clear business goal
It’s common sense but every great company needs a clear goal and a plan to get there. For a team to perform well they need to know exactly where you want them to take the company. Enough said.

4. Inspirational Leadership
Your team will be running on strong coffee and long hours so it’s very important they have an inspiring leader to keep them motivated. Sure, your highly intelligent staff members are like race horses but they still need someone to motivate and keep them running in the same direction.

5. A Reason
You now have a team of smart people working towards your goal and you better believe they will be asking themselves…what’s in it for me. You need a good answer to this question. There are plenty of ways to address this. Options, shares, bonuses. Pick something which suits your situation but just make sure there is something in it for them. There is nothing more demoralising for a smart, in-demand person than the feeling of working extra hours to make someone else rich. This should be avoided if you want to keep the talent you have spent so much time and money recruiting.

Put these factors together and your team will perform, it won’t be able to help itself. You will have the best talent working on an exciting and clear mission, motivated by an inspirational leader, happy in the knowledge that their late nights are going to make them rich.

Here are some photos of what Google believes makes a team perform. (Spot the people working – no I couldn’t either). For more go to Picasa

Managing your online brand

Posted: June 10, 2009 in Uncategorized

In 2 days time (from writing) Facebook are making named URLs available (eg http://www.facebook.com/johnsmith). This got me to thinking about online personal branding.

Company branding is often given careful consideration, but how about your own personal brand. This is the brand that sticks with you as you move between companies and it can make or break your career.

As everything moves online so does our brand. When I get CVs submitted to me I reach for Google and all of the skeletons fall out. I read a great CV last week then checked out the applicant’s Linkedin profile. It included his personal business site which I flipped open. It was the standard embarrassing one-man band approach, “We are bla bla consulting and we listen to what you want”. The problem is the site didn’t tell me anything good but it did tell me a whole lot of bad things – some of the styles were broken and overall it looked like a dog’s breakfast. The CV went into the bin and I went on to other applicants.

You could imagine a different outcome if I had found something like a blog with a long history of well thought-out content and technical comment. So, in this case, his online profile was more important that 10 years of work history.

I would make the assumption that every time you meet a business contact for the first time or submit a CV, your personal brand will be ruthlessly hunted across the net.

This makes it critical to manage what people will dig up, as carefully as you would (should) craft your CV. To do this you need to own your brand online and to put time into keeping it polished.

Own your Results

You should aim to own the top block of results for your name on Google. This way you can control how people experience your personal brand. For example if you’re a designer you want people to experience great design or if you’re a developer relevant technical content.

To do this you want to build a carefully managed collection of sites. Some examples are:
1. A linkedin profile
2. Your own site
3. Blog
4. Twitter

Own the property

When gmail came out how many people thought it was necessary to get your name as an email address…..yup and now you’re bobsmith.4.Washington. That’s right, you didn’t think it was important and now you’re paying the price!

I’ve had to convince people to purchase their own names as URLs. If your name is available you need to buy it! For the price of a lunch and a little time you now own the top result for your own name. If you don’t want to use it now, just park it. If it’s available now it won’t be soon and you will NEVER get it back.

The same applies for other technologies like the newly released Google profiles. I can’t tell you how this will be relevant but it’s a couple of minutes to claim your name and make sure its yours for ever.

In 2 days time Facebook will make named URLs available. This means you’ll be able to get http://www.facebook.com/yourName. This might not appeal now but is a good way of claiming some space before the 1000 other John Smiths grab it first.

Last week I accused a developer of being a “cargo cult programmer”. He had no idea what I mean so I had to take him on a quick journey through Wikipedia.

What is a cargo cult?

Back in the day, an isolated, indigenous society’s first contact with the outside world was a shock. The best examples existed in some small pacific islands where the native people could barely comprehend the new technologically advanced culture which had arrived.

They often coveted the more advanced society’s possessions which they called cargo. They had no idea how the settlers had amassed so much ‘cargo’ and came to believe that the new comers had been given this vast array of possessions by spiritual means.

This gave birth to cults which worshiped items of ‘cargo’.  These cults crudely imitated behaviour they observed by the owners of the goods and therefore presumed that the spirits would recognise this and send them ‘cargo’ as well.

Good examples of these cult rituals are setting up rooms like offices and dining rooms as places of worship and constructing things like radios out of straw and then dancing around them.

More info : http://en.wikipedia.org/wiki/Cargo_cult
Cargo Cult programming

A modern adaption of the term is ‘Cargo Cult Programming’. You can see the intimation. This style of programming is characterised by the ritual inclusion of code the developer doesn’t understand in the pursuit of a solution they also fail to grasp. All in the hope that something will fix the problem.

An excellent example of this is the ritual worship of code produced by other more advanced developers. Without any understanding of it, the cult member cuts and pastes this code into their program hoping that it will magically work.

This term is so apt in many circumstances, I hope you get as much enjoyment out of it as I did. So Enjoy!