Brian Shaler

Every few days, I read something new about start-ups going under or being acquired (but not in a good way). Pownce.com, iwantsandy.com, and (maybe) jpgmag.com are examples of sites I used shutting down. In the last few weeks, a few of my friends have pointed out sites they used getting shut down. Companies that are not throwing in the towel are tightening up. Many people are being struck by lay-offs. I read about rumors that large companies and start-ups alike are cutting people to try to stay lean during this weak economy.

My employer, BitGravity, is changing just as rapidly as many of these companies I read about. To be honest, it’s hard for me to keep track of how many people are at the company. When I landed at SFO on my way to our Burlingame headquarters, I checked my email on my phone finding several emails starting with “Re: Welcome ____” where “____” was one of three different names. I visit the main office once a month and it seems every time I show up, there are 1-4 new employees. We would probably be growing even faster if the start-up community wasn’t struggling to stay afloat.

Seeing the company thrive despite the difficulties of a recession is great. Of course, there is a focus on staying lean, watching expenses, and every effort is being made to make sure we only hire people who will be a good fit.

A project I worked on during 2008 was called Multiview, which is featured on our site at BitGravity.com/Interactive. It was a challenging project, and in some ways, surprisingly grueling, but the community reaction was amazing and made the whole thing worth it. As a Flash developer and a tinkerer, the thought of working for a company that will invest in ideas like Multiview is extremely appealing. Since we launched Multiview, I have been trying to come up with ideas for new ways to interact with video using a high performance CDN like BitGravity. If you have any thoughts, feel free to drop me an email!

It really is a joy working for BitGravity. One thing I have noticed my coworkers and bosses do very well that I personally need to work on is giving positive feedback and complimenting others. Sometimes I’m taken by surprise when someone seems blown away by something by something I made. When asked if I enjoy working there, I don’t hesitate to say yes. However, I haven’t — and feel like I should have — proactively given them positive feedback. Part of the motivation for this blog post was the desire to share with the world how I feel about the company, which is in some ways more of an endorsement of the company than a one-on-one conversation with the same feedback.

Sometimes I think about how I would improve companies I see around me. I dream up advertising campaigns, I figure out how to improve user experience on their web sites, and sometimes I consider possible alternative revenue streams that leverage existing assets. Yes, I am already aware of the fact I think too much and over-analyze things.

If I don’t talk to anyone about these ideas or post them online, it seems as if the thoughts have gone to waste. Generally, the ideas are specific to one company and do me little or no good keeping secret. The purpose of writing about the ideas would not be to get through to the target company, but to share with others my thought process and possibly provide inspiration for others who may have similar opportunities.

I received a coupon in the mail from Blockbuster a while back, and it got me thinking. The coupon was part of a promotion they were running for an upcoming motion picture award event (Oscar, Emmy, or Academy). It was pretty obvious they blasted this bulk mailer out to just about everyone. This type of bulk mailing seems to be a shotgun approach to get people into the stores. Aren’t there more efficient ways of doing it? I go to Blockbuster a couple of times per year, and that coupon didn’t seem to be enough to inspire me enough to increase my patronage.

There are, however, people who rent movies regularly and thus would be more likely to participate in a promotion like that. Realizing this difference in behavior between me and a movie aficionado, I thought about different ways of increasing activity in each group. The mailer I received was likely to be more effective on the active movie aficionado group than on the group I fit in.

The key to grouping people by behavior is right down my alley. You’re dealing with abundant data (millions of customers’ rental habits) and identifying trends. I would imagine a rental behavior graph would look something like this:

Expressed in that graph is a common philosophy recently promoted as the “long tail.” I am going to blindly speculate that out of 50 million households renting from Blockbuster, less than 1 million rent an average of two movies per week (100+ movie rentals per year). A larger segment is likely to rent an average of two movies per month (25 movie rentals per year). The largest segment, or the long tail, probably rents zero to ten movies per year.

In a mailer targeted on the upper two percentile (the 100+ crowd), if it results in one additional movie rental, it will increase sales with 2% of your customer base by 1%. Now, if you target the sixty to eighty percent of customers who rent less than ten movies per year and focus on increasing their rentals by one per year, you will increase sales with 60-80% of your customer base by an average of 50%.

One additional rental per customer in the lower sixty percentile is much more valuable than one additional rental per customer in the upper two percentile. It may take a more significant discount to get those less active customers to go out of their way to rent from Blockbuster, but there are two very important factors at play.

First, the most obvious, if you discount something enough to eliminate 90% of the profit and sell it to 30 million people (lower sixty percentile), you are still making more money than you would if you reduce 10% of the profit and sell it to 1 million people (upper two percentile). Second, if you double someone’s yearly activity, you are taking a step toward forming a habit (like weekly or monthly “movie night”).

Beyond targeting segments of people with bulk mailers, Blockbuster should be able to react to behavior changes. There is no reason why they shouldn’t notice and react when a customer who rents movies every month misses a month. Why not drop them a coupon in the mail to make sure they haven’t forgotten about you?

There are tools and people available these days for any company to perform intensely detailed behavioral analytics on their customers. Reacting to a specific customer’s behavior is traditionally some a small, agile business owner would do. Today, large corporations have the ability to be agile on a per-customer basis. They will need to perfect the art before their competitors do.

And again, I already know I think too much!

Technology changes the way we do things. The fact that it does is not an astounding revelation. However, it is always fascinating to see how it does.

When we think about “creativity” from a classical perspective, we might picture a person creating a piece of artwork, whether it is a painting, a piece of music, a novel, etc. In the past, creative collaboration occurred on a very small scale, if at all. Today, the creativity landscape is shifting, thanks to the tools we have at our disposal with modern technology. One of the key ways technology has changed the world is communication. This opens the door for a type of collaboration that was not possible before.

How does this impact our view of “creativity”?

Unlike the past, where a creative, highly-skilled individual — or a small group of highly-skilled individuals — would develop a work of art, we can now develop tools that allow millions of people to contribute to a single project.

One example of this is Drawball.com. Drawball, which launched in late 2005, allows anyone to pick up a virtual airbrush and paint graffiti on one giant digital wall. While the majority of users contribute little more than a mess of scribbles, there is a “hall of fame” area that showcases some of the best drawings spotted on the wall.

Another example, though on a much smaller scale, is BrainFuel.tv’s Caption Contest Fridays (with spin-off site Caption Fridays). Every week, there is a new photo that begs the question “What’s going on here?” and visitors are encouraged to make up a caption to explain what is going on in the photo. It is great to go through the comments at the end of the day to see what the blog’s readers had written.

This concept is fascinating and motivated me to start small, for-fun projects like Crappy Graphs (where visitors can draw their own ‘crappy graphs’) and TwitLibs (where visitors choose words or phrases to fill in the blanks in my sentences). I am constantly surprised by how great (or how terrible) the visitor submissions are.

Crappy Graphs started out as a blog where I drew and posted my own graphs. After releasing the user submission tool that allows users to draw graphs in my design/template, the best visitor-submitted graphs found their own way out onto the internet and now draw in more traffic than the main blog itself. That means collectively, Crappy Graphs’ visitors are funny than the original Crappy Grapher, me.

It is clear to me that none of us are as creative as all of us.

In the web development industry, most companies build applications for their clients but deep down inside want to build the “next big application” for themselves. The client work pays the bills now and the internal project will rake in millions — when or if the team can get around to building it.

I hear about these ideas all the time and doing so usually reminds me of an episode of Ze Frank’s “the show” entitled “Brain Crack“:

It is very common for the exciting, innovative idea to be put on the back burner repeatedly. We all do it. Somehow, you have to be able to say no to the money you could be making with client work today and spend time on your internal project which will pay off in the future.

Nothing is free. Time is money.

Spending time on your internal project will cost real money. Therefore, this expenditure must be viewed as an investment. Any work you turn down to make room in your schedule for development of the project would be considered the cost of this investment.

Do not abandon the process.

Another common pitfall when trying to build an internal project is management. People often think that you can build it on the side — poke at it for a few minutes here and there between other things. If the project is relatively simple, this may be possible. Generally not.

Once people free themselves of clients and work on their internal projects, they generally neglect to use a standard development process. Without a client breathing down their necks, developers often want to forget about deadlines, schedules, meetings, reviews, and setting up milestones.

A development team is a machine that thrives on structure. Making schedules, determining features, and having meetings are pivotal for a smooth development cycle. The normal structure needs to be maintained for internal projects. In order to be productive, you must treat yourself like you would a client because you are your own client. Schedule reviews. Set deadlines and milestones. Allocate time in your schedule as if it was paid client work.

Do not procrastinate. There is no time like the present.

Many people do the client work now and plan for the internal project later.

When? Later.

The part of Ze Frank’s “Brain Crack” video that most people should be able to relate to is the part where he says “You can tell yourself that you don’t have the time or resources to do them right.” Generally, this is just an excuse to procrastinate. You can make the time. You probably have the resources to at least get started. If you do not have the resources, you should be working on that right now.

You can do it. You are just uncomfortable with the sacrifices you will have to make to get your idea off the ground. The only way you can get it off the ground is by making those sacrifices and investing the time.