Google is the "serious" search engine?

This morning, Roger pointed me to this blog posting about the top search results for 2006 for three of the major search engines. While the posting is pretty humorous, it may explain SharedPlan's pay-per-click (PPC) results with Google and Yahoo.

Because SharedPlan transacts all sales through the website, PPC advertising is the largest component of the company's marketing spend, and the company advertises on Google, Yahoo, and MSN. Even though the search terms SharedPlan purchases are about the same on all of them, the productivity of each engine is dramatically different.

For search-only results (ignoring content results so that I can compare apples to apples), Yahoo provides about half the number of clicks that Google does. (MSN numbers are so small that I'm not even going to describe them.) Given their relative share of total search volume, that may not be that surprising. However, they differ dramatically in their clickthrough rates, with Google providing six to seven times greater clickthrough rates. The difference becomes more magnified when you consider the rate a which these clicks become conversions, which in the case of SharedPlan means when the prospect downloads trial software. The conversion rate for Google is 2.5 times that of Yahoo.

There are a lot of factors that may lead to these differences, like the ads for Google are structured and displayed differently than for Yahoo, even though we use the same messages in each. Alternatively, the explanation could just be their different users, as illustrated by Nicholas Carr's list.

Or it could just be black magic ...

A birthday spectacle like I've never seen

Gina's graduate school roommate, Cathy, is turning 40. Her husband, one of the founders of a large hotel operating company, decided to throw her a huge surprise party. They live in Old Greenwich, CT, and held the party at a New York boutique hotel, the SoHo Grand.

Gina and Cathy and their other two roommates still get together for girls' weekends every year or two, but other than that our families don't really interact that much. However, I was intrigued to go to it, mostly to see the spectacle.

And what spectacle it was.

The day started with a small group of friends joining Cathy for some beauty pampering. This was the diversion to let Cathy think that her birthday was going to be a more low-key affair. Given that they booked the penthouse suite of another boutique hotel, the Tribeca Grand, for the day and brought in all of the stylists and equipment from a smoking hot local salon (whose clients include Gwynneth, Gisele, and several other name-dropping-worthy celebs), I'm not sure "low-key" was achieved.

120 of Cathy's closest friends gathered at the Grand Lounge at the Soho Grand (all rooms were gratis), where we started eating and drinking at 6. Delicious appetizers, including one of my favorites, caviar, were served by lovely young women dressed as elves. That is, the kind of elves Santa needs if he's only giving lingerie this year. The birthday girl arrived promptly at 6:30.

At 8, we moved to a different room where dinner was served, including lamb chops, seared beef, salmon, sushi bento boxes, on and on. As we were eating, we were treated to a brief performance by the Manhattan Transfer, who stopped by on their way to another concert. The freakin' Manhattan Transfer!

At 10, we moved up to the penthouse suite, where we were treated to yet a third round of food, including White Castle style 'sliders,' crab cakes, and on and on (again). The elves accompanied us upstairs and were joined by some go-go dancing elves, wearing even less and platform dancing to the live R&B band.

At 11, we were treated to a video montage of Cathy's life and a three-tier cake that looked remarkably like a wedding cake.

At 12, the police arrived to shut down the band because neighbors were complaining from the street, 17 floors below.

At this point, Gina and I were beat. Please recognize that we were still on Colorado time, so our biological clocks were screaming that it was almost 10:30, far past our bedtime. We went down to our room, which happened to be on the 16th floor, directly below the party. Gina claims that she woke up at 2 to lots of screaming upstairs, so I guess it went at on at least until then. I did not wake up to share the experience with her.

Oddly, the whole spectacle had much the same feel as a wedding. Probably the most enjoyable aspect for me was to see the Connecticut couples that lead such different lives than I do. For instance, we heard several conversations comparing nannies and discussing corporate mergers and acquisitions, and not a single one debating carbon fiber versus titanium road bikes.

I truly appreciate the opportunity to attend the spectacle, and it was good to catch up with some old friends. For my 40th birthday, Gina took me to dinner with about four other couples that we're close to, and it was one of the most memorable evenings of my life. Memorable for quality moments shared with good friends, not for the Manhattan Transfer and caviar. That's really more my style.

The loss of neighborhood culture

Our friend Mary Ann lives on the Upper East Side of Manhattan. She's a block from Central Park and the Metropolitan Museum of Art, and across the street from the Czech embassy. (Strangely, there was a twelve-foot inflatable rat on the sidewalk in front of the Czech embassy. I can't say that I fully understand the cultural implications of that.)

She's on the corner of 83rd and Madison Avenue, and along Madison Avenue there are many tiny little retailers: butchers, bakeries, delis, wine stores, shoe and specialty clothing stores, on and on. Gina and I spent a few afternoon hours exploring some of these little nooks. We noticed, though, that there were large Banana Republic and Gap stores in the neighborhood, as well.

That evening at dinner, Mary Ann complained that, as rents increase, the small shopkeepers were being forced to move out and were being replaced by large chain retailers. The independent commerce that made this area unique is dying, being replaced by the same products that anybody can buy anywhere. This is why I have a big problem with franchise or chain restaurants, and I avoid patronizing them.

Now, I'm a big fan of small business owners, and I recognize that many local franchises are owned by local businesspeople. For instance, I have a friend that owns a Quizno's and another with several Supercuts stores. I also recognize that large national chains became successful because they have a product or service that works and that people want.

But because of their scale, when Macaroni Grill enters a local neighborhood, they have such large economic advantages over the little family Italian restuaurant that it becomes nearly impossible for the local restaurant to compete. A high volume restaurant, like Chipotle, has supply cost leverage that an independent local restaurant can't match, allowing them to, say, have a person that does nothing but make salsa, so the salsa you get is always the freshest possible. A small, independent family Mexican restaurant can't do that and still maintain the same profitability.

A couple of years ago, Tucson recognized that they were losing their local restaurant base and its associated culture, so the mayor formed a buying cooperative for independent restuarants. The cooperative allowed the independents to get some supply chain economies and helped improve their competitiveness.

The bottom line is that, unless the chain restaurant gives me something I can't get at the independent, I'm going to keep going to Murphy's or the Golden Lotus, rather than Red Robin or PF Chang's. I don't want to live in a world without the independents. Small is beautiful.

A run in Central Park

Yesterday morning I got up and did one of my favorite travel activities; I went for a run. We were in NYC for a birthday party (much more on that later), and we stayed at our friend Mary Ann's home on the Upper East Side, a block from Central Park.

I have only been to New York a couple of times, and had never been in Central Park. It was a perfect morning for a run, with clear, sunny skies and about 60 degrees. There was actually a race going through the park at the time, with several thousand participants, but I avoided that. They close the streets through the park on weekends, so there are lots of runners and bikers.

The reason I love to run when I travel is that I see a city in a very different way when I'm running, and the distraction of the sightseeing makes the running time just fly by. I have run in Honolulu, London, Calgary, Paris, Rome, Shanghai, the French Alps, and Nice.

Central Park is not as big as I pictured it to be. It's big, maybe five miles north-to-south and a mile east-to-west, but the impression I've always had from maps, movies and TV shows made me think it was larger. I think it's just that the Manhattan island is pretty small.

There were cyclists riding a circuit around the park, which has to get pretty boring, but I was still envious. As much as I enjoy running through a new city, cycling through one would be even better.

One of the best things about living in Boulder and running in Central Park is that I felt like I could run forever. I did about five miles and could have done several more, even though I haven't been running much. I quit because my knees would have made me pay for it later. And since I found out that the opening band for this party is Manhattan Transfer, something tells me that I'm going to have to do some dancing later.

Has anyone seen our rocket?

We enjoyed shooting our rocket so much last weekend that we decided give it another go, this time with the biggest rocket engine that would fit in it. I was curious how high it would actually go.

Has anyone seen it? Because we never saw it come down.

Using that engine in the Alpha III rocket is supposed to lift it over 1000 feet. Yes, 1000 feet. But I thought we were being pretty smart by using an engine with a very long delay before it blows its parachute. That way, even it if went up 1000 feet, it would have lots of time to fall back down to a more reasonable height before popping its chute, and the wind wouldn't carry it a mile away before it hits the ground.

The problem is that you can't see this rocket from 1000 feet. All we saw was a trail of exhaust smoke that went straight up into nothingness. It may actually have achieved low earth orbit. I hope it didn't interfere with the shuttle's work on the International Space Station.

We gotta buy another rocket. Maybe this time we'll write our phone number on it in case someone finds it.

Rockets are the greatest

Sorry I haven't posted in a while, but the combined commitments of the holiday season and Ryan's birthday always tend to wipe me out in December. Ryan's birthday is too close to Christmas, so we try to celebrate it early in the month. We did so yesterday.

When Gina and I discussed what kind of party we should throw for him, we discussed some common themes like going to some 'fun center' or something like that. I can't tell you how much I dislike those kinds of kids birthday parties.

As I posted recently, I'm always on the lookout for ways to expose my kids to science. I decided that it would be cool to shoot rockets at his party. I made and launched a lot of rockets when I was a kid, and thought it would be fun for him to experience the same thing. We asked him and he agreed, although I don't know if he really understood what it was all about. And I know Gina didn't know what to expect.

I took him to a local hobby shop and we bought a starter kit from Estes Rockets for about $35 or $40. It comes with everything you need for two launches, except for a few batteries. We also bought a few extra engines in case it was a big hit and the kids wanted more launches.

In the days leading up to the party, I played it up a little to make sure he was still excited about the rocket theme, and he certainly seemed to be. However, when we assembled the rocket, it took a lot more time than I expected, and he seemed to get a little bored with the concept.

Until we launched the first one. Holy cow.

Yesterday was a classic, beautiful Boulder winter day. We had just received about 8 inches of snow over two days, but Sunday was cloudless and perfectly sunny, if a little cold. We launched from a snowy park a couple of blocks from the house.

This thing shot several hundred feet in the air in about two seconds, disappearing to a little pinpoint in the blue sky, and everyone went crazy. It started to reappear as it fell, then the nosecone blew off with a little puff of smoke and the parachute deployed perfectly. The kids chased down the falling rocket, and we had three more perfect launches.

As I watched that rocket shoot up into the deep blue sky and smelled the sulphur in the exhaust, I was struck by a flood of childhood memories. I remembered the fascination of seeing my rockets disappear into the sky and trying to imagine what it would be like to ride one into that great unknown.

At that age, I wanted to be an astronaut or a pilot. I even thought about applying to the Air Force Academy, going so far as to get a recommendation from Colorado's Senator Gary Hart (remember him?). Eventually, my focus turned more to science than flying, but shooting that rocket brought so much of that childhood fascination back.

I don't know if Ryan is going to be as fascinated by it as I was, nor do I care. But I want to give him the opportunity to be, and I think I helped to do that. The party seemed to be a big hit with Ryan and his friends, and his buddy Jake told me that he was going to ask his dad for a rocket party for his next birthday, as well.

(But nobody got as big a kick out of that first rocket launch as Gina did. I think she thought this thing would pop up 50 feet in the air and fall down, and when it launched nearly out of sight, she went nuts. I love it.)

SharedPlan - the evil Huns

I recently discovered this goofy website that identifies interesting mnemonics that can be made from your phone number.

I put in SharedPlan's phone number (303-845-4861) and the most interesting result was "30 Evil Hun 1."

If you need any help with SharedPlan, feel free to call the 30 Evil Huns at extension 1.

A day at the aquarium

I avoided Black Friday by taking the boys to the Denver Downtown Aquarium. (I don't really get why they need the word "Downtown" in the name. It's not like there are many aquaria in the metro area.) We had not been to the aquarium since its former incarnation, Ocean Journey, and it has changed dramatically. In fact, although I only went to Ocean Journey a couple of times, there is little of Ocean Journey that I recognize in the new aquarium.

I say that even though the big exhibit tanks, with the sharks, coral reefs, and tigers haven't changed much, and the flash flood simulation is still there. But gone are the large displays of Colorado river life, i.e. 10 kinds of trout. Good riddance.

They have crammed many more revenue-generating activities in every possible area. Balloon animal-makers, palm tree climbing, much larger gift shop, sit-down restaurant, bar, gold-panning, etc. are everywhere. It's a little claustrophobic, but if it keeps this version of the aquarium solvent so that my kids can enjoy it for a few more years, I'm OK with it.

Overall, it's significantly improved, even with all the nickel-and-dime stuff everywhere. We had a terrific time.

Andy Goldsworthy

Every several months, my lovely friend Loui accompanies her husband Rick on his sales trips to Colorado, and Gina (now nicknamed Rockhead, but that's the subject of another post sometime) and I always try to get together with them. Loui is always a very thoughtful gift-giver on these visits. For instance, on her last visit, she gave us Keb Mo's Keep It Simple, introducing us to this wonderful artist. I have since recommended this CD to several people.

This time, she introduced us to Andy Goldsworthy, by giving us both a book and a documentary DVD of his work. Both the book and the DVD are mesmerizing descriptions of how Andy creates art in nature and of nature, using materials he finds out in the woods or by the sea to create sculptures in the same environment.

These pieces often are soon destroyed by the same natural forces, such as the tide or the sun, that gave them life in the first place. I now can't get this concept out of my head, and I see parallels to it in so many things.

Don't worry, I'm not going to go all intelligentsia on you. I mean, I'm still the same guy who loves Old School, Evanescence, and Limp Bizkit. But Goldsworthy's ephemeral works are truly bewitching.

Changing the voice of the website

At SharedPlan, we have been discussing our website a lot lately. In particular, Roger realized how the text sounded a little stiff and cold. We want the website to not only tell people what we do, but to do so in a way that we would do if the visitor were sitting in the same room with us. In other words, we want our website to reflect a little of the personalities at SharedPlan. So I have been gradually changing the 'voice' of the site over the last week or two, and I will continue to do so.

I make these changes, and really any website changes, with a little bit of trepidation, however. It's probably easy to take things a little too far, and all of a sudden we'll find ourselves written about on webpagesthatsuck.com.

I'm a big fan of that website. Today, they called out msdewey.com, Microsoft's horrible new search engine front end. Roger also highlighted this one on his blog.

Maybe I should think about it a little differently. In the spirit of "there is no such thing as bad publicity," maybe we should try to win one of their Worst Web Design Techniques Featured on WPTS in 2006 awards. Then again, maybe not.

Buyer's remorse

Last night, Gina and I joined several friends to attend a fundraiser for Dental Aid, a local organization that provides dental health services to those who can't afford them. The black tie event included both silent and live auctions.

The silent auction included dozens of items, including dinners at local restaurants, spa services, gift baskets, all kinds of stuff. Gina donated a gift subscription to her Flying Five Coffee (and she was very pleased that it sold for quite a premium over the retail value).

The big-ticket items were reserved for the live auction, which was MC'ed by a professional auctioneer. The items included a denim jacket that had been hand decorated by Dave Matthews, various vacation packages, and other unique offerings.

This was my first live auction like this, and the auctioneer certainly had a gift for whipping up the excitement in the room. I think both Gina and I were a little too caught up in that excitement.

This morning, we're both nursing healthy doses of hangover and buyer's remorse. Neither of us is a budding photographer, so did we really need that 6-hour photography workshop?

I guess it all goes to a good cause ...

"Share the Road" license plates

I am an avid recreational bicyclist. In particular, I'm a road cyclist. In good years, I'll get in over 2000 miles riding on the shoulders of our local streets and highways. (My current bike has over 13,000 miles on it, so I think it's time to upgrade. That's a whole other post, though.)

Bicycle Colorado is a terrific and effective local advocacy group. For instance, they recently worked closely with the Colorado State Patrol and convinced them to rescind their new cap on the number of cycling event participants.

They're now sponsoring a petition to create a "Share the Road" Colorado automobile license plate. Proceeds from each plate will fund bicycle safety education programs across Colorado. If you'd like to sign the petition, go here.

And thanks for sharing the road with me.

Microsoft just doesn't get it

A while ago, I posted about my father-in-law Fred's search for an MP3 player. At the end of that post, I said:

"I will enjoy seeing the failure of Microsoft's new Zune player, as I enjoyed seeing the failure of Dell's."

It's not that I wish ill on Microsoft (although I strongly dislike how their monopolistic behavior has stifled software innovation over the last two decades), I just believe that they don't get it. If they are unable to push their view of the world onto the consumer, then they don't know how to compete. They fundamentally don't know how to define and market products if they don't have a huge market share hammer to wield. So, when I say that I will enjoy seeing Zune fail, I mean that I will enjoy seeing them schooled in a competitive marketplace.

What made me revisit this topic? I just read this article on Forbes.com, which has several examples of how the folks at Zune just don't get it. Granted, it's an opinion piece based on sketchy hard data, but the examples are exactly what I would have expected from Microsoft.

[Just after I originally posted this, I stumbled across an actual review of the Zune. This author makes several similar points as the one above, but he closes with an interesting thought:

"Version 1.0 of Microsoft Anything is stripped down and derivative, but it is followed by several years of slow but relentless refinement and marketing. Already, Microsoft says that new Zune features, models and accessories are in the pipeline."

Of course, as Zune is working hard to catch up to what iTunes/iPod already has, Apple continues to march onward.]

Got any Big Science Saturday ideas?

About two years ago, my older son was given a science kit of some kind for his birthday. It had about a half dozen experiments, most of which needed adult assistance to execute. We performed an experiment each Saturday until we had worked through them all. We started calling that time "Big Science Saturday," and both boys seemed to thoroughly enjoy it.

Since then, we have worked through a few other kits and lots of kids' science books. Big Science Saturday (BSS) comes and goes as we have materials or ideas and as I am able to work it into our schedules. We have probably performed more than 50 different experiments.

Ryan is now approaching eight years old and Maddox is now four. We haven't done BSS for a few months. I'd love to restart the event by moving into more exciting experiments, with electricity, rockets, explosions, or other things that might capture the imagination of an eight-year-old (as well as a four-year-old).

I haven't had a chance to do a thorough search online yet, but can anyone point me in the right direction?

Training in Boulder for marathons

Yesterday, the New York Times published an article (free registration required) on the training scene of top professional marathoners in Boulder. As always, I'm a little awestruck that these running superstars all converge on Boulder. (Check out my earlier post on the Japanese runners.)

My parents used to live in Albuquerque, and we would go visit them a couple of times a year. While I was there, I would frequently run around the perimeter of a local private school campus, which apparently was a favorite training loop from some Kenyan runners. (Albuquerque is at about the same elevation as Boulder.) They once passed me with their long, easy strides like I was standing still. At least, I think that happened. I'm not quite sure because I generally run in a haze of gasping exhaustion.

Airfares are suddenly really high

My family lives in the Denver area, and my wife's lives around Chicago. Her aunt Yolanda's family lives in Rome, and Yolanda winters in Florida. We tend to alternate between Denver and Chicago for Christmas, but this year I thought it would be fund to spend Christmas with Yolanda's family (including Giulia) in Ft. Lauderdale.

Then we checked airfares. Wow. I expected something around $300 each, but it was more like $500. Even Chicago is high this year.

I'm not sure what the plan is now, but I think Florida is out. Bummer.

How to use SharedPlan software tools

Based on the emails and phone calls that we receive from prospective SharedPlan customers, our product offerings can sometimes be confusing. We have put a lot of energy into addressing this problem in various ways:

• We completely reworked our website in late August and early September, making it cleaner, simpler, and with a more logical flow. Based on various indicators, we believe the new design is working better. For instance, Google Analytics (see Roger's post on Analytics) are telling us that: our pageviews per visit have increased from about 3 in August to over 4.5 in October; and in August 50% of visitors stayed less than 10 seconds and 30% more than a minute; in October, 45% stayed less than 10 seconds and 33% more than a minute. In other words, visitors spending more time and seeing more of the site than before. Hopefully, this translates into better understanding of our products.
• We created a special web page with brief usage examples. This page seems to work pretty well, because 87% of those that visit the page move further into the site.
  

We're not really finished with the process. I'm current writing a white paper which will go into much more detail about different project management environments in our target markets and how SharedPlan tools fit into that environment to improve project performance.

This is a continuing effort and if you have any constructive criticism, I'd love to hear it.

Giulia and the new Hamilton Wing of the DAM

Gina's (that's my wife) cousin Giulia works at the Denver Art Museum. Giulia has a couple of degrees in art history, and she has a gift for describing art in terms that the average man (that's me) can relate to.

For example, her family has lived in Rome for years, and Gina had a small family reunion there a couple of years ago. (Gina's entire extended family is quite small, less than 20 people. I probably have twice that many cousins that I haven't even met. The Earles clan knows a little something -- or maybe not enough -- about procreation.) Giulia guided the family on a spectacular tour of the Vatican. If you have never been to the Vatican, it is filled with art, to the point where it all starts to look the same. By telling stories about the artist, the era in which he lived, and what he tried to do with the piece, Giulia was able to make each piece come alive, and weave all of the pieces in to a tapestry of culture and history. By the end of her tour, our little eight-person family group had swelled by 20 or 30 eavesdroppers.

I experienced something similar with Giulia at the grand opening of the DAM's new Hamilton Wing, the architectural marvel designed by Daniel Libeskind. We went to the event with several friends, none of which are particularly art-inclined. We saw some interesting, odd things, none of which we really understood. For instance, we spent some time in the Vicki and Kent Logan Collection, which is full of some truly bizarre, if not a little disturbing, pieces.

For instance, there's a large installation piece when you enter the room that has about two dozen headless, lifesize, identical Buddha (?) statues that look just like the two-thousand-year-old ones. In the place where the head should be, there are tiny little doll and action figure heads, suspended a couple of inches above the Buddha's necks. While all the statues were identical, each head was unique.

I'm looking at this thing, not knowing what to think. And the whole room is full of wonderfully bizarre pieces like this. Then Giulia gathered us together and explained that the Logans assembled pieces that illustrate the artists' interpretation of modern mixing of cultural or racial backgrounds and influences. For instance, the artist that created the Buddha piece is Asian, but raised in a Western environment, and was trying to comment on the Western influences on Asian culture. When viewed in the light of this tiny sliver of knowledge, the entire collection came alive for me, and I can't wait to return and spend more time with it.

I can't wait for my next opportunity to experience some of Giulia's enlightenment.

Braver than I

Just wanted to post a photo of my son at the Butterfly Pavilion, a unique facility in Westminster, Colorado where you can commune with all kinds of bugs.


As many times as I have taken my boys to the Butterfly Pavilion, I have never been able to bring myself to let that tarantula (her name is Rosie) walk on me. He's a braver man than I.

Desperately seeking salesperson (Susan?)

SharedPlan is on the verge of something big. After years of product development, and the introduction of some building-block products, we are now introducing the products that begin to deliver on the vision of the founder, Roger Denton.

Our initial products, SharedPlan Personal and Professional, were mostly sold to individuals, with a small percentage of sales being multilicense transactions. However, the new offering, ProPlanning, is an complete solution for midsize and larger businesses. We now need to change our selling strategy to address that market segment, so we have been putting feelers our for a salesperson to help us do so.

I recently forwarded the following email to some local groups I know:

SharedPlan Software (www.sharedplan.com; www.sharedplan.net) is a startup software company looking to accelerate our sales growth. We currently have over a thousand license holders, all of whom were captured using online marketing techniques and transactions with no salesperson involvement. We are now seeking to hire an experienced software salesperson.

Past sales came from products that we view as 'foundational' products; they were created as a means to get to where we are now, but not as final end products. We have just launched the new products that will now begin delivering on the company’s vision. We are now poised for significant growth and we are looking for an experienced enterprise software salesperson to drive that growth.

This position will initially be compensated with company equity only. SharedPlan is completely bootstrap-funded, with initial revenue but limited cash. We have four current contributors, one of which is full-time while the others have 'day jobs.'

The initial engagement would be part-time, working out of the candidate's home or from SharedPlan's world headquarters (the founder's basement offices), with flexible working hours. This is an ideal position for someone working in another position that wants a low-risk way to 'test-drive' a startup, or a stay-at-home mom looking for a way to re-enter the workforce.

If you'd like to learn more, please contact me directly.

If you know of someone in the Boulder area that fits this description, please point them my way.

I love Halloween

I recently realized that I won't be home on Halloween. Halloween is a big event at my house, and trick-or-treating is huge in my neighborhood. We generally have 200-300 kids visit the house.

Usually, I go around with the boys while my wife stays home to greet the trick-or-treaters. I always wear a costume, and over the years my costumes have gotten ever more elaborate. Here's a shot of last year's, with my two boys:



My costume looks pretty unremarkable, but it was really cool (if I do say so myself) because Oscar the Grouch was a puppet. My arms are inside the trash can and controlling Oscar, and the arms in my sleeves are fake. As I said, it looks unremarkable, but in person, when Oscar popped up out of the can, people were mesmerized.

I had started planning this year's costume a month or two ago. (I always have some candidate ideas that I'm batting around in my head.) But now I'm going to be away on business. While I will be attending a couple of Halloween events on the prior weekend, it's just not the same. I guess I'll just have to table those costume ideas until next year.

The human capital VC

I was recently introduced to Brian Tsuchiya, the founder of FirstWheel Venture Group. FirstWheel is a unique venture firm that, rather than providing capital in the form of cash, helps you raise human capital, essentially employees that work only for equity (sometimes called angel employees).

While angel employees are pretty common in early startups, the FirstWheel model is much bigger. Brian developed this model for his own company, Walking Orbit, which hired almost 100 people working for equity only. These people were located around the world (I think they were mostly software developers), and he spent many dollars and hours assembling the legal, financial, and technical systems to implement the business.

The issues that Brian had to resolve are very complex. For example, if the equity is distributed based on the employees' ongoing contribution, then the IRS is going to view that as income and want to tax it, which is a big problem for employees. Also, the company's equity structure can become exceedingly complex with so many shareholders with dynamically changing ownership. The systems Brian had to put in place must have been very robust.

He has now taken these systems and started FirstWheel as a new alternative to a traditional venture firm. He was recently written about in the Denver Business Journal. I spoke with him on the phone the other day, and he mentioned that he's pursuing patents on some of the technology he developed, and that he has a 41-page contract that angel employees sign that defines their participation and compensation. More broadly, his intent is to help companies like ours to implement this model, rather than seeking cash only. In exchange, we would pay his firm fees and equity.

I haven't yet met with Brian, but am planning to do so within the next week or so. I'm not yet convinced that this makes sense, either overall or for SharedPlan.

For instance, we coincidentally met a woman who had worked as a project manager at Walking Orbit. Her comments on the model were pretty mixed. On the negative side, she said that some potential employees either balked at the 41-page contract, or at least were concerned enough about it to feel the need to pay an attorney to review it for them. She also described the challenge of trying to manage projects to completion when her human resources all had other jobs and were working on her stuff when they could. Their availability was never very predictable.

I'll be interested in learning more when I meet with Brian.

Bring Freikers to your school!

My older son, Ryan, is seven years old. I have been trying to develop his interest in riding bicycles, both because it's something I love to do and because I think it's something he could eventually be pretty good at it. Mostly, I think it's a great way to extend his horizons so he can explore more of his world.

So, we do a lot of family bike rides, probably three or four times a week all last summer. Most of those were pretty short, maybe just around the neighborhood or to the tire swing and treehouse about 2/3 of a mile away. I haven't been able to convince him to ride his bike to school yet, though. It's a longer ride, about two or three miles, pretty consistently uphill.

Recently, however, a local Boulder citizen started the Freikers (rhymes with "bikers", as in frequent bikers) program. The program offers prizes to kids to ride their bikes to school; the more they ride the cooler the prize. The riders tape a small RFID tag to their helmet and when they get to school, they just walk or ride their bike below a sensor that registers their participation that day.

Although Ryan showed a little interest in the program, he still balked at the possibility of riding all that way. But then he started seeing packs of kids riding by his bus stop on their way to school, and he saw all of the bikes in the bike racks (it's really amazing!), and realized that several of his classmates were riding.

So we finally all rode as a family to his school for the first time last Friday. It was definitely a little hard for him and we had to take it easy, but he did it, and he was very proud of himself. And I can't tell you how proud I was of him ...

I hope the Freikers program grows and spreads around the country, because it is so sorely needed, for so many reasons.

The need for a lead

I had been considering writing a post on some of the challenges we at SharedPlan have faced on the fundraising front. Specifically, we have worked hard to find a lead investor that 'gets' our segment and business model.

David Cohen has just written an inciteful post on the "emotional angel investor," which pretty much exactly describes who we have been looking for. Of course, it's easy to understand the process to find that person, it's another to execute ... and still drive the business forward.

Fred's MP3 player search

My father-in-law, Fred, recently wrote an email to the family requesting advice on MP3 players. He wants to buy one, and he's going to both buy music on line and rip his own CDs. You should also be aware that, while Fred is a long-time computer user, he's no techie or gadget guy.

I recommended the Apple solution to him, the iPod and iTunes, because it is brain-dead simple to use the complete solution. The software is easy to use, the store is cleanly integrated with the software, and the click-wheel controls and menus are all absolutely intuitive. In addition, the accessory offerings, like external speakers and carrying cases, are much broader because of iPod's market leadership position.

My sister-in-law, Laura, enjoys her Creative Zen Micro, which she uses to listen to her own ripped song collection.

Coincidentally, the NY Times published a review of the non-Nano MP3 players. While the title, "Singing the Praises of the Non-Nano," would indicate that they had raves for the other players, I certainly didn't get that feeling, particularly when you consider the complete offering.

The bottom line for me is that I have tremendous appreciation for Apple's design abilities, and even though I also sometimes bristle at their "sledgehammer marketing" (including their digital rights management stance), I will continue to lust after and buy their products.

And, I will enjoy seeing the failure of Microsoft's new Zune player, as I enjoyed seeing the failure of Dell's.

Entrepreneurs drinking martinis

Last winter, Jeff Bisberg (a very smart guy, cofounder of Albeo Technologies, and a former coworker of mine at Picolight) and I started getting together for the occasional beer or martini to discuss our respective entrepreneurial activities and challenges. We were occasionally joined by SharedPlan's founder, Roger Denton, and we very much enjoyed the free-flowing conversation, ideas, and of course, cocktails.

At some point, Jeff suggested that we start inviting a broader set of people involved in, or at least interested in, entrepreneurship in Boulder. We did so, and 'officially' formed the Entrepreneur's Martini Group. (Someday, in a future post, I'll describe my fondness for the classic martini.) The group has now grown to an invitation list of about 25, and we typically get 12-18 at any event. We meet every 6-8 weeks at a local watering hole.

I enjoy these meetings immensely, because I get very jazzed by the creative energy of these people. Some that have attended in the past include:

• Pete Rast, founder of Stratasearch, a stock technical analysis software tool
• Pawel Osiczko and John Horne, who together are a fountain of business ideas and are bound to eventually find the one that works for them
• Scott Dalgleish, who, along with his wife Susan (who should also attend in the future), founded Dragonfly Innovations
• Steve Cox, formerly engineering director of Crosswalk but who is now starting something involved with multiprocessor ICs
• Andrew Funk, who started C-Port, an IC company that was acquired by Motorola, a few years ago and is currently looking for the next opportunity
• John Ives, founder of a market prediction company (I'm not sure how public he is about the company, yet)

Lots of fascinating conversation, and always good drinks. I feel humbled to be around such smart, fun people, and lucky to live in a place that fosters such entrepreneurial spirit.

If you would like to join us at our next outing, feel free to comment below.

Tech financing trends in Colorado

I recently posted that I went to a Rockies Venture Club meeting. The main event of the evening was a panel discussing the state of technology financing in Colorado. The panel included Seth Levine of Mobius Ventures, Gary Held of CTEK, and Alice Kotrlick, Colorado Office of Economic Development and International Trade.

I won't bore you with a synopsis of the evening, but the panelists made a couple of points that I thought were significant.

Seth spoke a little about the cost of starting a Web 2.0 company. Part of why he mentioned this is because I had just pitched SharedPlan as such a company. It has been a bit of a challenge to estimate how much cash we will actually need, so I was keenly interested in these comments. He first stated that enterprise software companies always require $25 million got get going; that's just what they cost. (Salesforce spent about $50 million before generating positive cash flow.) However, the social network dynamics of Web 2.0 let those companies have significantly smaller marketing budgets than traditional companies. Seth stated that these characteristics might mean that they need $8-10 million, rather than $25 million. Sharedplan has some social aspects, since we're building online project communities, but it's difficult to predict the benefits of communal viral activity on our cash flow.

Gary also made an interesting point. He started by describing the growth of organized angel investor groups like CTEK, stating that there are something like 90 of them nationwide now. But then he went into the funding success rates of those who pitch to these groups. Nationwide, the average less than 2%, and West Coast Angels, probably the best known of these groups, last year examined over 600 investment opportunities, but only funded 3. Gary was quite proud that CTEK funded 5% of the companies they saw in the last year. I find those numbers remarkably low. Are there really that many problematic startups out there, or is the process broken?

A cool, new Boulder startup: DragonFly Innovation

My friends, Scott and Susan Dalgleish, have started a new company, DragonFly Innovation, that has a unique goal, to teach kids creativity. Not art, but creativity, through the use of craft kits. I think that's really cool, because creative thought is such a unique and valuable skill (that I have always wished I was better at).

They have recently started gaining recognition, having been nominated for a Boulder County Business Report IQ Award, and having been written about in the same publication.

They have chosen to sell their kits through multilevel marketing, i.e. home parties. That's probably a good choice, given the nature of the product and the target audience. (I have some related thoughts on MLM, which I'll address on a later post.) I'm excited to watch their progress.

I wonder if there are kits that could be used to teach adults creativity?

Picking up the crap

I recently attended a Rockies Venture Club monthly meeting, in part to pitch SharedPlan to potential investors. The event included four or five companies pitching for 5 minutes each, then featured a three-person panel to discuss angel and VC investing in Colorado. The panel made some very interesting points, which I will describe in a later post.

However, I wanted to highlight the most entertaining pitch I think I have ever seen. Actually, I haven't seen a lot of pitches, but I have seen an endless number of PowerPoint presentations, and this was one of the most fun.

I think the presenter's name was Barney (Barney, if you're reading this and I got that wrong, I apologize and please email me with a correction), and he was not a polished speaker. However, he spoke with true enthusiasm for his product, Crap-on, and that made all the difference.

Crap-on is a doggy waste bag that does not require the user to 'handle' the mess. I'm not a dog owner, but I have seen the procedure used all-too-infrequently on my own front lawn. The owner inverts a plastic bag on her hand, reaches down and picks up the poop, then pulls the bag back over the pile and ties a knot in it. All fine, except for that unpleasant picking-up-the-poop part.

That's the problem that Crap-on is solving. Crap-on is a bag that holds a circular shape so that, when the dog "assumes the position" (Barney's term), the owner quickly places the bag on the ground in the target zone. Even better, the bottom of the bags have pictures of squirrels, cats, or other animals that drive dogs crazy, right in the bottom center. I guess the dog is supposed to derive particular pleasure by pooping on his nemesis. The owner then grabs the Crap-on by the draw-tie handles and is good to go.

I loved this pitch! I have been in technology my entire adult life, and I have very little exposure outside of this world, so when I see a product idea like Crap-on, presented with such fervor by a true believer, I find it tremendously refreshing. I have no idea if Barney will be successful, but I'm certainly rooting for him. His website, as I remember it, was www.crap-on.com, although it doesn't appear to be up yet. If any of you see it, please support Barney.

We're famous in Japan

I live and work in beautiful Boulder, Colorado, USA. One of the reasons I love living here is the active, outdoor culture here. As a wannabe runner and cyclist, I appreciate all the ways the city actively supports those activities and the breadth of the healthy lifestyles represented here.

These Boulder characteristics, combined with its elevation (5000 to 6000 feet) and Colorado's sunny climate (300+ days of sunshine per year), make it a favorite training home for elite athletes. American examples include bike racers Tyler Hamilton, Davis Phinney, and Ron Kiefel, and runner Uta Pippig. I recently heard that Boulder has about 20 Olympic medalist residents. One Olympic 10K runner, Colleen De Reuck, lives in my neighborhood and I often see her running by at a blistering pace; a pace that is probably her everyday, easy pace that I couldn't match on my best race day.

The Japanese national marathon team owns a house in my neighborhood, as well. Many of the top Japanese runners, including Naoko Takahashi (Q-Chan), 2000 Olympic gold medalist, have lived and trained there. They spend several months in the house, then the house is empty for several months. They have been here all summer, and you can see them running everywhere around the city. Most of the time, they're running quite slow (my kind of speed), but when they're moving, they're really moving.

Their coach, Koide Yoshio (Koide-san), also lives in the house with them. From what I understand, Koide-san is a very famous coach in Japan, sort of like Phil Jackson or Bill Parcells here. My neighborhood friend, Eric, occasionally takes Koide-san out for sushi. Eric once offered to bring the athletes along, but Koide-san pointed out that with the number of calories the athletes eat at every meal, Eric couldn't afford to take them to sushi.

I recently found out that the Japanese athletes keep a blog about their life in Boulder. It's all in Japanese, but I enjoy seeing pictures of my neighborhood on it. It's strange to think about my little neighborhood being discuss on a Japanese blog.

It's just one of the great things about Boulder.

Boy, we got that wrong

It has been a big week for me, with lots of home and work changes. On the work side, Roger and I have decided that the way we structured SharedPlan's revised product offering is just not right and is leading to confusion among our current and prospective customers. What's a little humorous is not that we got a certain aspect of the marketing 4Ps wrong (product definition, pricing, promotion, and placement), but that we got a little bit of everything wrong.

We came to this conclusion by examining direct (e.g. sales revenue and trends) and indirect indicators (e.g. how people move through the website and where they exit, and the kinds of support questions we received). I'm not sure we got any aspect of these revisions completely right.

Luckily, we haven't publicly announced these changes yet. We have only announced them to our newsletter readership. I will have to publish an embarrassing follow-up email to them to explain how we're going to fix it. The fixes will be in place this week, but I'm not sure when I'll send an email to our readers.

It's always humbling to recognize that, no matter how much you think you know about something (like technology marketing, in my case), it's no guarantee that you'll do things right everytime. But you hope you get close ...

Does anyone know how to fly a kite anymore?

Yesterday's weather was frustrating. It started in the morning (at my son's soccer game) with spitty, spotty rain. Toward the end of the game, a howling wind blew in. I checked the local weather site, and the wind was gusting at 45+ mph, with steady speeds of 20-25 mph.

It was looking like it was going to be a pretty bleak fall day. However, soon the clouds gave way to sun, although the wind remained. So, what to do with two kids (ages 3 and 7) on a sunny, windy fall day? Of course, you fly a kite.

Now, we live in Boulder, Colorado, so winds like this are not particularly remarkable. (Something about being nestled up against the foothills of the Rockies.) Therefore, you would think that kite-flying is a pretty popular activity. In fact, Boulder has one of the best kite stores I have ever been in. (I have only been in a couple, but it's a very cool store, regardless.) However, every time we go to our local park, we seem to be the only ones who know how to fly a kite.

I believe that kite-flying has become the victim of two conditions. The first is the popular belief that kids don't play outside as much. On these blustery days, maybe it is easier for kids to stay in to play on their Playstations, and maybe it is easier for busy parents to let them do so.

The second is that many parents, like myself, remember kite-flying being a complete pain in the butt. The traditional diamond kite, made with paper and two sticks and with a tail made of a strip of torn sheet with a few bows tied on to it, is a lousy thing to fly. Difficult to launch and difficult to keep airborne. When we were kids, how many times did we have to run with that kite to finally get it up in the air? Dozens? While kite-flying had a certain romanticism attached to it, the execution was always difficult.

Since my wife and I are big believers in kicking the kids outside whenever possible, and because we live in a very windy place, and because about five years ago we bought the coolest, easiest, modern kite (something like this), we fly kites all of the time. So that's what I did with my boys yesterday.

We went to our local park, where there were about two or three other families trying to fly kites. Our brain-dead-simple kite went right up with no effort. (It doesn't even require someone to launch it. The pilot can just hold it in the air and play out string as it ascends right from his hand.) After other families struggled with their kites, several of them ended up flying ours. Eventually, my boys and I went to play on the playstructures while others flew our kite. (One kid was named Raffy [Raphael], such a typically-Boulder unusual name.)

I think I have become a kite ambassador in our park, introducing families to the joys of flying technologically-advanced, economical, easy-to-fly modern kites.