Today we bring you a story about the flaw inherent to traditional economic theory, and an inherent human attitude about scarcity that gives the lie to this thinking. We asked Gamification expert and occasional Stanford University lecturer Yu-kai Chou to write a blog post about how scarcity can drive demand. You may remember our conversation with Yu-kai during The BizSpark Show (see video embedded below this post).
About the Author: Yu-kai Chou is an Entrepreneur, a Partner at the Enterprise Gamification Consultancy(EGC) and a Gamification Pioneer who has been working in gamification since 2003. Yu-kai is the original creator of the Gamification Framework Octalysis, and is a regular speaker/lecturer at organizations like Stanford University and Google Inc.
When I was studying economics in school, the one fundamental lesson that the professors always talked about was the supply and demand curve. It basically says that if the price of an item drops, the demand will increase (moving forward on the demand curve).
If the item becomes completely free, the curve will indicate the maximum number of buyers that will acquire it. But if you have studied behavioral psychology, gamification, and/or human focused design, you will find that there's another side to the story. It turns out, being one of the 8 Core Drives of Gamification, Scarcityis another beast that drives consumer behavior. Scarcity is the limitation of something (an item, a resource, a service) towards meeting the corresponding demand. In economics theory, scarcity is well understood, but only in the sense of objective limits matched against the consumer's utility derived from a purchase. The issue here is that, almost all economics theory starts off with two key assumptions:
But in the real world, these two assumptions almost never hold true - people are often irrational and never really have perfect information. Often they react to pricing in another, more surprising way: the more expensive something is, the higher the value (utility) is placed on it. This leads to increased demand. As a result, sales may actually increase with pricing. Normally, if an item were free (the extreme right of the demand curve), everyone who would want this product would obtain it. Say hypothetically, 100 people would do this. But sometimes, if the product is unusually expensive, people who previously didn't care might suddenly want it. Now sales may exceed 150 items! Because of this scarcity effect, a real demand curve in some products might produce a C-Shape instead of a diagonal line moving down to the right. Scarcity works because people perceive that something is more valuable if it is more expensive or less attainable. Because people don't have "perfect information," they generally do not know the utility of a certain good. Therefore, they rely on cues - such as how expensive or limited something is - to determine how valuable something is. If everyone wants it, it must be good!
I've personally seen numerous examples, both first and second hand, where increasing the price actually allowed people to sell more. Not too long ago, one of my clients was trying to choose between two service providers, one who charged $8,000/mo and the other $10,000/mo. I informed him that I thought the $8,000/mo provider would deliver better services. However, my client remained doubtful, feeling that the $10,000/mo provider must be better because of the pricing. I told him that just because one service charges more doesn't mean it is compellingly better. Ultimately my client decided to use both of the services for a period of three months. After this period was up, we saw that the $8,000/mo provider was exceptional, while the $10,000 was very disappointing. In this case, if the lesser service provider would charge $6000 instead of $10,000, he might not even get a chance to try for 3 months (of course, focusing on creating value is the most important so you don't lose your job after 3 months). On another occasion I had a client that needed a CPC campaign audit. I contacted a friend who was the best in the industry from Eastern Europe. Since I had done some favors for him in the past, I was able to persuade him to help my client with a free audit, which he would have charged thousands otherwise. Though my client was excited about the arrangement, he hesitated and moved very slowly. I pressed my client on this and he said, "What worries me is the free price … is he really as good as you say he is?" He had perceived that my friend’s service was not really valuable because it was offered for free. That's why it might have been more advantageous to charge a smaller fee such as $500 for the audit instead of giving it out for free.
This situation doesn't just happen in high end services. In the book Influence: Science and Practice, author Robert B. Cialdini describes a story of a friend he had who ran an Indian Jewelry Store in Arizona. The owner was trying to sell some high quality turquoise pieces during the peak tourist season. Despite her constant efforts to promote and emphasize these pieces to the shop visitors, no one bought them. Finally, the night prior to an out-of-town buying trip, the owner concluded that she needed to lower the prices and make the pieces more attractive to her customers. As a result, she left a note for her head salesperson with instructions to reduce the prices by half. However, the salesperson misunderstood the note, and mistakenly doubled the price on all the pieces. Upon returning a few days later, the owner was pleasantly surprised to learn that all the pieces had been sold. Doubling the price on each item had actually allowed her to sell more because the perceived value of each had increased. In his other book Yes! 50 Scientifically Proven Ways to Be Persuasive, Cialdini describes situations where inconveniencing people can result in them valuing something more. The book notes that, for infomercials, calls will increase substantially when the message is changed from, "Operators are waiting" to "If operators are busy, please call again later."Why would this be? In the first case viewers can imagine operators waiting to answer calls and take orders for products that may be of marginal value. In the second case viewers will more likely perceive that the operators will be struggling to answer a flood of calls and keeping up with the demand on orders. The perception will be that the product value is extremely high, and that the viewer better call in and order while they can. This type of perceived social proof works great in sales.
The most obvious application for start-ups is to launch with a confident pricing strategy. Instead of just offering everything for free or easily available for everyone, a more premium pricing model or exclusivity might also increase the confidence of users/buyers with a result in increased conversion rates. Another excellent example is how Facebook utilized “scarcity” in the form of exclusivity. Initially Facebook was exclusive - being only for Harvard students. Then it opened up to the Ivy League schools, and eventually to all colleges and high schools. Finally, everyone was allowed to join. Because people early on couldn't get it, they were “crazy” about it. The sense of scarcity and exclusivity created more demand than if Facebook had been “open to all” from day one. Zynga's Farmville also manufactures scarcity to make their product more addicting. Instead of farming for as long as you want to play (the basis for most games), you are often forced to stop and wait for 8 hours before you can continue to play the game. This causes people to think about the game ALL THE TIME. They may log in after 3 hours, 4 hours, or 6 hours, just to check and see if they can reap their crops, even though they know as a fact that 8 hours have not transpired. If Farmville simply allowed people to farm to their hearts' content, people would eventually stop, and not think about it all the time. In the game Geomon (recently shutdown due to a business transaction with a major tech company), gamers try to capture all the monsters in order to fight against each other. The game is similar to Pokemon, but influenced by the environment where the gamers are physically based. In Geomon, there are certain scarce monsters that can only be found in very limited or special situations, such as in proximity to a company, or on days where the temperature is over 110 degrees. Because some of these monsters are extremely rare, people are willing to spend real money in order to obtain them. One such example is the Mozzy, which can only be caught next to a Mozilla Office. In this image, notice how people seem to be desperate to get a Mozzy: Another example is the Laurelix, which at one point was owned by only 3 players in the game. The company actually received a call from the mother of a player, saying, "My son has been sick for a week, and he said only a Laruelix can cheer him up. I don't know what it is, but he said you have it. I'm willing to pay $20 for a Laurelix. Can you give that to my son?" Interestingly, these monsters are not necessarily more powerful than regular monsters, but because they are so hard to get, the perceived value increases immensely, helping the entrepreneurs to better monetize their game. Wootis another company that uses scarcity to drive sales. The enticing thing about Woot is that you never know what product will be promoted. The site also sets a limit on the number of people that can claim the deal. Many who check Woot at 4 PM will see an amazing deal, but typically find that the item is sold out. As a result their eagerness to get the next product will increase, motivating them to constantly return to the website. Eventually a great amount of buyers wait on the site at 11:59 PM each day, just to see the next product as soon as it becomes available. Once it does appear, they are ready to quickly snatch it up.
Another good example is the "Fail Whale" in early years of Twitter. The Twitter site was often down in 2006 and prior. Even though this frustrated many users, they waited more eagerly for the service to return (and talked about when it will return on Facebook). I've seen cases where people were planning to retire from playing a game , but then encountered issues due to massive servers problems, and instead of quitting, checking the app every day to see if they "can" play it or not. Even though they planned to quit, they needed to quit on their own terms. When they were prevented from playing because they "couldn't," their desire to play actually increased. What made the situation worse is that "sometimes" they would be able to play the game, only to experience another crash. If it was just indefinitely down, people would lose interest, but the "sometimes working" game would take on an addictive appeal. This behavior is much like how people pull on a slot machine, hoping for but not necessarily expecting good results. The same effect happend with Twitter, where users became obsessed with checking the service each minute to see if the service had been re-established, eventually increasing traction.
Viewing exclusivity as a form of scarcity is illustrated in the South Park episode "Cartman joins NAMBLA."Here, Cartman constantly brags about his new group of "mature grown-up friends" to his rival Kyle. After several exchanges of Kyle saying, "I don't WANT to join your group" and Cartman rebutting with, "No, you CAN'T join my group", Kyle finally feels compelled to learn how to join the group. The desire to become a member of Cartman’s group is now present in Kyle, where there was none before.
Of course, this doesn't mean start-ups should pull down their servers on purpose. Besides pricing your service/product with confidence, you may want to create a sense of exclusivity for each step during the Discovery and Onboarding stages, where the service makes them feel that it's uniquely for them; that they uniquely qualify for the access (Email notification that is only sent to VIP members). They now have exclusivity as the "Harvard students", the "Apple Fans", or even more broadly as "people who signed up the newsletter." For actions that lead to rewards and investments, instead of allowing unlimited actions (such as “liking” as many times as you want), consider more restrictive options. Often, placing a cap on how many actions a person can take (or investments that they can make) will cause them to desire it more. Some entrepreneurs may have experienced this in the case where fundraising for their venture becomes smoother once they inform investors that the round is closing and that their money is no longer essential (Or that there is space for only half the amount that investors want to put in). By using scarcity and exclusivity, businesses can influence consumer perception of their products and services. By increasing perceived value, customers and users are more likely to stay engaged and take greater interest in your venture, while making sure you don't give out all your hard earned world-changing work for close to nothing. Of course, if you price an item outside what is affordable to your target market, then this could backfire. But more often than not, when customers don't buy your product, it's not because they can't afford it. It's because the perceived value they have for your product is not worth the cost (and sometimes that cost is in the simple form of time investment or "talking to my boss about it."). Learning Gamification and Human-Focused Design is a great way to craft customer perception and get them to see your service as valuable beyond anything else that exists in the market.
Today, Windows Azure announced enhancements and changes in the Windows Azure Offer available to BizSpark members through their MSDN subscriptions. For a comprehensive review of the changes, you should read Scott Guthrie's two blog posts about the matter:
Windows Azure: Announcing New Dev/Test Offering, BizTalk Services, SSL Support with Web Sites, AD Improvements, Per Minute Billing
Windows Azure: Announcing Major Improvements for Dev/Test in the Cloud
Here are a few highlights that we think BizSpark members might find particularly interesting:
We are excited about today’s announcements, especially the increased flexibility, discounts and per-minute billing that can help BizSpark startups save money as they build in the cloud.
For additional questions on your BizSpark Windows Azure benefits, please email bizspark@microsoft.com
Every year, we take the ten to twelve hottest startups in the BizSpark program from Europe and vote on what the market thinks is the absolute hottest startup. We've created a list of the twelve finalists for this year's Microsoft BizSpark Euro Summit, which will be held in Berlin July 4. You can now vote on your choice.
Please read through these companies. Click on the Vote Now link under the one you like. The scores will be tallied after voting closes on July 4.
Booklikes Country: Polandwww.booklikes.com
BookLikes is a global blogging platform designed for book lovers that lets its users create a personal webpage with a blog, virtual bookshelf and reading timeline. It’s a mix of a Tumblr-like blog platform, book cataloguing site and social network. BookLikes is a service designed particularly for people interested in books with functions dedicated to book readers.
Book lovers can share book reviews and other book-related content, follow interesting blogs, read reviews and texts by other popular users or simply collect and organize books on virtual bookshelf. BookLikes is available in three language versions and gives insight into 12 book databases from 30 international booksellers.
Vote Now
BugSense Inc
Country: Greecewww.bugsense.com
BugSense is on a mission to set the quality standard for mobile apps. Analyzing 5 billion metrics each month across various platforms, BugSense provides more than 20,000 developers globally - including Fortune 500 companies - with app performance reports that help developers identify issues and create better mobile app experiences.
BugSense solution has the largest distribution in the industry (3rd most used SDK after Google Analytics and Flurry).
VOTE NOW
Omegawave
Country: Finland
www.omegawave.com
Based on research in sports science and space medicine, Omegawave provides leading methods for monitoring an athlete’s functional condition. Omegawave delivers instantly relevant advice on the optimum amount of intensity and volumes of training. By identifying an athlete’s physiologically limiting factors and providing guidelines to eliminate them, Omegawave helps to improve performance, prevent overtraining, decrease injuries and improve fitness and overall health.
Omegawave technology has been used by multiple Olympic Federations, premier soccer teams such as FC Barcelona, teams from the NFL, MLS, and NHL, and various other leading sports organizations. The company’s global headquarters are in Espoo, Finland.
RapidApe
Country: Germanywww.rapidape.com
Tracking of TV ads is mostly guessing. Existing tracking tools are barely able to deliver accurate performance measurement promptly.
RapidApe is the first BI tool combining TV tracking and monitoring in one solution, giving clients full insights in the performance of their TV campaigns.
RapidApe generates data for the performance of a TV ad regarding the campaign's goals and connects TV tracking with data that makes sense.
Schutzklick (Simple Insurance)
Country: Germanywww.schutzklick.de
simplesurance GmbH, operating under the name Schutzklick, is a provider of sales channels in eCommerce Shops for insurance products. The company offers various technical integration types to automate the closing and administration of insurance products. The insurance product portfolio covers all eCommerce relevant insurance product types.
SCREEMO
Country: Israelwww.screemo.com
SCREEMO enables creation of real life interactive experiences between smartphones and digital screens.
SCREEMO is the world’s first cloud based SaaS platform allowing the fast, simple, and low cost creation and measurement of interactive experiences and abilities never available before to the mass market.
SCREEMO's patent pending solutions are up and running almost immediately at any location which is pre-deployed with digital screens, with no integration needed.
ScreenHits
Country: UK
www.screenhits.tv
ScreenHits is a B2B and B2C online marketplace for the buying and selling of television and film content. It replaces the existing model of TV channels sending their teams to trade shows around the world to acquire content for their network. This new model aggregates content from the leading producers and distributors worldwide and filters it based on the needs of its buyers. ScreenHits provides instant viewing access of all the shows, which allows buyers to make quicker and more cost effective purchasing choices in a reasonable timeframe. In addition, with its highly intelligent search engine, buyers can search for content based on price, available territories, genre, rights, etc. It also provides helpful insight by engaging the viewing public to vote on the shows they want to see on TV.
FidMe / Snapp
Country: France
www.snapp.fr
With 8 years of existence in mobile app development, FidMe - Snapp’, is Europe's leading mobile wallet application, allowing users to gather free loyalty cards of retailers and other businesses in one single place
Spreaker
Country: Italy
www.spreaker.com
Spreaker is a platform for creating and sharing audio, both live and pre-recorded. It allows people to capture live audio streams (interviews, music, comedy shows), edit them in real time by adding music and sound effects and share them everywhere.
Stonewash
www.stonewash.co.uk
Stonewash create magazine frameworks for smartphones and tablets. This enables magazine and catalogue publishers to turn offline content into visually compelling online content quickly on multiple platforms, enabling new revenue sources without disrupting their existing workflow. They also collate vast amounts of data on reading habits through reader profiles and subscriptions, which they provide to the publisher. Stonewash is the first app to provide detailed in-app analytics, and was the first app approved by Microsoft for Windows 8.
Wantr
Country: Denmark
www.wantr.com
Wantr is a shopping tool that lets you collect all your favourite online stores in a single place, and updates you on their latest arrivals and sales. With an increasing need for a better overview in the online shopping space, Wantr provides a solution for people who want to stay updated on the latest styles and products in a fun and interesting way - without the hassle of checking multiple websites.
W.S.C Sports
Country: Israel
www.wscouting.com
W.S.C Sports Technologies helps broadcasters and media rights owners to exploit and monetize their digital sports rights with an automatic video generation platform that creates customized and personalized videos according to fans' preferences and editorial content. Using the platform, broadcasters and media rights owners generate new revenue streams from their video assets with increased inventory, number of video views and fan engagement.
Sonal Mane, a Microsoft startup technologist in Chicago, provides us with the second chapter in a series on effective and efficient Windows 8 development. This series helps members in Microsoft BizSpark move quickly through the design of an app in Windows 8.
One of the key reasons for apps being rejected or sent back for fixes is Design. This is a five part series where I will cover five key highlights for each design principle that aims at helping developers build a high quality app.
Today's topic will be Pride in Craftsmanship
Literally translated, to take pride in the work you are doing, you will naturally want to focus on the details. Every pixel matters. Think through and iterate as you build out your design. The easiest way to accomplish high quality craftsmanship is to use a design language based on typography and the grid system. Let's dive a little bit into these two areas, the Grid and Typography.
1. Grid
The Grid is a simplified system of grouping user experience elements together and works for the web. It provides a rhythm to your app and makes it look structured and easy to navigate. Across various screen sizes and devices, the Grid makes it easy for your app to scale and look great at the same time.
Three things to keep in mind while designing with the Grid are,
* Focus on cleanliness, readability and alignment.
* The grid is formed by the content itself and the space around it. There are no visible gridlines around the content. Use space to create groupings and communicate the sense of relationships and structure in your content.
* Use the power of the grid to design with size, proportion and position. Use proportions to create visual hierarchy that allows users to easily scan and see the structure of information.
2. Typography
Great typography is not only beautiful and readable, but it also conveys structure and information hierarchy. Windows 8 designers looked at print and the web and applied the same principles to Windows Store apps. Windows is based on clean, beautiful typography which creates a sense of structure and rhythm. It also establishes information hierarchy while consistently using a small set of fonts, font sizes weights and colors.
Three things to keep in mind while designing with typography are,
1. Use the Segoe UI font as it is the most recognizable font.
2. Use only four font sizes to establish information hierarchy. The Windows UI is a great example to look at. The font sizes are 42 pt, 20 pt, 11 pt, 9pt.
3. For Chinese, Japanese and Korean, you can use the Meiryo UI.
Here's a screenshot that explains the typography using font sizes and weights.
Here's an example of an app that uses the Grid template and enhances it to create a beautiful user experience while maintaining a clean, content-first and proportionate look and feel.
At minimum, if you keep use these two things - Grid and Typography, you app design will be a lot cleaner and structured. Here’s a video that dives into the layout around grid and covers more details on typography.
Here are today's #BZPitch pitches. When you sign up to Microsoft BizSpark, you are introduced to literally hundreds of thousands of people working on over 50,000 startups.
To take advantage of this, sign up. When your application is approved, dive in on Facebook, Twitter, and in LinkedIn.
On July 4, Microsoft Germany will host ten finalists that represent the top entrepreneurial talent in Europe. They will gather at the new Berlin offices of Microsoft Germany and celebrate the ninth annual BizSpark European Summit. You can follow updates from this summit here on the blog and also on Twitter, where we will be tweeting out live photos, videos and links at #bizsparkeu. Please follow @bizspark for Tweets in English, and @bizspark_DE for more tweets in German.
Confirmed speakers and judges:
Here are your finalists
Booklikes Country: Poland www.booklikes.com
Country: Greece www.bugsense.com
Country: Germany www.rapidape.com
Country: Germany www.schutzklick.de
Country: Israel www.screemo.com
Snapp
With 8 years of existence in mobile app development, Snapp’ provides packaged m-Commerce and m-Loyalty solutions to key accounts retailers, chains and small businesses. Snapp’ develops FidMe (www.fidme.com), the European leading loyalty wallet mobile application with more than 2.2 million users accounts, and 4000+ loyalty programs. FidMe is available on every smartphone and uses the latest features offered by mobile devices.
Sonal Mane, a Startup Technologist working for Microsoft in Chicago, walks you through steps to make the Windows 8 app development process easier.
Here's her first post in a series.
Welcome to the 'Windows 8 design principles simplified' series. One of the key reasons for apps being rejected or sent back for fixes is Design.
Today's topic will be Do More with Less. It should give you a firm background on what reviewers look for in the app review process, and it will give you a premise with which you can begin your designing.
Designing for touch requires a few prerequisites that you would need to think through. Without these basics, you are not going to get too far.
1. Avoid distractions - The key idea is to trust you users and enable them to focus on where they are. Not where they need to go. As you approach design, focus on utilizing the real estate and what the app is great at. Clear the clutter and strip away everything that takes away from the app and your best-at statement.
2. Clearly define your best-at statement - To aid the decision-making around design, identify the single most important functionality that your app is best at. This means understanding your value prop and scope clearly and crystallizing it to a single statement. As you iterate on your app and add future versions, you can evolve and update your best-at statement. For your first iteration, keeping a narrow focus will help resolve several design decisions and issues.
3. Content over Chrome - Content is your best friend and the easiest way to get users excited about your app. High quality content also means you can draw attention without bells and whistles and attract users to your app. This means leaving only the most relevant user experience elements on the screen. This also means letting users immerse themselves in what they love and explore the rest. The thing to keep in mind is to flip the design mindset, think about solving to avoid distractions and not discoverability.
4. Clear out the Chrome - Chrome means navigation, layout, commanding and interaction. For example,
* Chrome comes from navigation, tabs and other navigational tools as they are used to help a user finding their way around an app.
* Chrome can come from layout that include boxes, rules and other content that is placed on the canvas to help organize content.
* Chrome comes from interaction and commands placed on the canvas to help users complete scenarios and features.
Simple rule to follow here is that if you see any user experience that helps with user navigation, layout and commands - Clear it out! Windows 8 has built-in design to help you work these elements into your app.
Here's a screenshot that focuses on the music video content and albums without cluttering the user experience with navigation, commands and layout.
5. Navigation, Layout and Commands Navigation - Pixels are precious so don't waste them on navigation. Sounds counter-intuitive when you focus on discoverability. Shift that focus on your content and think about where you are at and your content, not about the places where your user could go. When designing Windows Store apps, you can actually make the content itself navigable and remove this navigational chrome. Where does this navigation chrome go? It goes to the navigation bar from the top edge. Layout - Create visual clarity with crisp graphical elements. Remove lines and boxes to group and organize content. Give content breathing room through intentional use of space. This means that there is no need to draw lines around your groups. No need to draw arrows and create outlines on your user experience. Think space and not, boundaries. Commands - Integrate commands into the content. Leverage the edge. Provide commands contextually. Commands go in the app bar that shows up from the bottom edge. The content itself is interactive so your images headlines, titles and content can be tapped on to navigate to something. Search, Share, Settings and Devices go in the Charms that show up from the right edge. Login goes into right edge on the right sidebar.
How do users see these hidden navigation and app bars and charms ? The app should pop the relevant user experience based on context. For e.g. when a user selects multiple images, that is an indication to pop the command bar. Guess what, the user is about to perform an action on these images.
Here's a screenshot of what the navigation and app bar look like.
Want to dive deeper into this topic? Check out the video on Do more with less for more details.
This map comes from Microsoft Technical Evangelist Vitor Ciaramella. Feel free to share.
Inspiration for start-ups can come from all kinds of sources, but often, the start-up’s founder can remember a ‘lightbulb’ moment when they had the big idea. Tiago Fernandes, a student entrepreneur from Portugal can recall that exact point of time when the lightbulb went off for Taggeo: “I was talking to one of my professors at Porto University and he was saying how he loved to ride his bike in the mountain, take photos and then share those with other people. It made me think that there had to be a way to share that experience even further.”
Sounds like FourSquare, right? While it shares some of the same features, Tiago’s start-up, Taggeo, takes the whole concept one step further and makes sharing event-based information a rich experience. Taggeo is an application that allows you to leave your tag (text and/or images) on a given place, making it visible to the whole world or just to your friends. Taggeo gives you the power to leave your mark anywhere: almost as if you were able to leave sticky notes, to hang pictures or just to write, pretty much everywhere.
The only boundary is your imagination. This is what makes Taggeo so fun and such an effective way of sharing information, and, of course, of looking for it as well. Say you want to get feedback on a restaurant, a shop, etc. Just look for public tags (or your friend's tags) left on that very same location. If you are there, you will get them through the Taggeo app. If you are anywhere else, you can view all those tags in your PC, phone or tablet browser, simply by visiting www.taggeo.org.
The business model is two-tiered: one, collaborative marketing projects with other partners (for example, a brand might use Taggeo to leave highly customised messages for users in a specific city). Taggeo will receive a small fee if the user receives the message, then another slightly large fee if the user reads the message. The second level of the business model is to offer Taggeo’s services for custom-building applications using the technology.
What made Tiago think he had the know-how?
“I’m a computer engineering graduate and am in my third PhD year at Porto University. I’ve also done work experience at the European Space Agency, where I began to realise the huge potential of geo-location applications.”
So how did Tiago turn his idea into a startup that by the end of March 2013, already had over 2000 users worldwide (and growing fast)?
Tiago explains: “As well as myself, I also have two colleagues – who like me are still studying – who are helping out on marketing, communications and business strategy. Recently, we were also awarded 25,000 Euros by winning a competition called Arrisca C, organised by the University of Coimbra. This is helping us to continue developing Taggeo and other app ideas across IoS, Android and Windows Phone.”
“When I first looked at the Windows Phone platform, I was a bit concerned because it was new and I thought that might mean it would be unstable. But it has been a great development platform for us: it is more flexible than the other environments. I’ve been so impressed that I’m thinking about extending our use of the Microsoft stack to include Azure.”
“But more than that, the help we’ve had from Microsoft has been great. Sure, access to free technology has been very useful, but Henrique Carreiro and the rest of the Microsoft team in Portugal have been amazing. They’ve given us lots of support and introduced us to useful contacts.”
Tiago has also recently become a Microsoft Student Partner. “I like the fact that Microsoft works closely with universities, providing help to students through initiatives like DreamSpark. Microsoft works hard to create a good community for students, so I’m very happy to be a Microsoft Student Partner and share that knowledge with my peers.”
Finally, what does this year hold for Tiago and the Taggeo team?
“We’ve just launched a new version of Taggeo so we’ll be interested to see how that is received. We also hope to create some games and other apps and make those available worldwide.”
“Sometimes it is tough balancing study against being a start-up, but I’ve got used to having little sleep! Having our own company means that we can create our own jobs, rather than depending on the local job market. It’s an exciting time to be a start-up, even in a country where the economic environment is tough.”
Douglas Crets is talking with David Weekly, Facebook's Developer Advocate for Asia, at 3pm Pacific on livestream.
You might know David from his time at HackerDojo, which he founded. He recently joined Facebook as their new developer advocate for Asia.
David Weekly is Facebook's new Developer Advocate for Asia. He joins Facebook after an acqui-hire of his most recent company, Gaston Labs. David is the founder of Hacker Dojo, the largest non-profit hackerspace, PBwiki (now PBworks) - the first private wiki host, and Mexican.VC – the first Silicon Valley seed program for Mexican tech companies. David is helping developers worldwide connect with the Facebook Platform, Open Source initiatives, and Parse.com. He graduated as a President Scholar with a Computer Science degree from Stanford University in 2000 and is an award winning startup advisor and author of the Startup Guide to Stock & Options, which has been read by over 300,000 people.
SiSense is one the newest big data analytics companies you might have heard about recently. Over the past few weeks, the company, a Microsoft BizSpark startup, was elected Top 10 Big Data Startup by CIO Magazine, Top App To Try by Inc. Magazine and was selected Top Innovative Company by the Under The Radar Conference.
Their product, Prism, is now in production in 49 countries. Customers like Target, Merck and ESPN use the company’s business analytics stack to find actionable insights in the sea of Big Data.
SiSense revenue grew by 520% last year, and the company recently concluded a $10M financing round led by Battery Venture, one of Silicon Valley’s hottest Venture Capital firms. The company officially launched in October last year so, I caught up with Bruno Aziza, the company’s marketing chief, to find out how his company made all that happen in less than a year.
Bruno Aziza, VP -- Marketing, SiSense
1. You’ve received a fair amount of attention recently for growing so fast and being funded. What advice can you offer bootstrapped entrepreneurs who are really trying to achieve scale quickly, so that they can begin to fuel their startups with revenue?
It’s true – we been fortunate to be covered multiple times by some of the best in the world, from Wall Street Journal, TechCrunch, VentureBeat, GigaOM, Inc, CIO Magazine and many others.
Growing a startup is not easy and I’ve found that startup memes these days take entrepreneurs attention away from what matters most when running a business. Call me traditional, but entrepreneurs should focus on one thing and one thing only: customers. They should make sure they understand who their customers really are, what solution truly solves their problem and what exact value customers put on “removing” whatever pain they are suffering. Getting funding should not be perceived as a goal in itself, it is a milestone that is reached to accelerate your ability to execute on your mission.
I often tell entrepreneurs “funding shouldn’t be your goal. It’s an activity. Your job is finding customers who are willing to pay you to solve their problems”.
2. Funding obviously wasn’t the goal for building the company, but what did you tell investors about the way you were growing that seemed to make sense to them and convince them of building that relationship?
There is no secret here. We have disruptive technology and a game-changing approach. That’s what explains why we have so many customers and grew by 520% this past year.
We play in a field - the Big Data Analytics space - that hasn’t seen a lot of innovation for decades; most vendors have legacy technology that prevents them from serving customers in the most effective way. So, when investors see that you have the product, the team and world-class execution, the discussion is much more interesting for the entrepreneur and the investor. It’s a win-win.
The key to success is building a strong product and show that you have the ability to meet mass demand quickly. Anyone that meets our team, interacts with our product can tell that we are built on very solid ground and that our engineering is generations ahead of what’s available today. Investors like to see this. To tell you everything, I had investors who flew just to come meet us at our events and offer to be part of our round. When this kind of attention occurs, you know you are doing something right.
So, my advice is pretty straightforward. It has 3 key points:
1) Focus on building a strong product that solves a big problem. The challenge of our times is not that we can’t build products. It is that we can build anything! As a consequence, too many people end up building products that solve no-one’s problems.
2) Go Big or Go Home. Don’t just build something that’s a little better than what’s available. Your approach needs to be at least 10 times better than what’s available. ‘A little better’ doesn’t cut it.
3) “Vive La Difference”. Embrace your difference. Challenge conventions. And don’t just talk about it – prove it. When we showcased our 10x10x10 challenge, most people thought that our performance was impossible to attain. When they saw the solution, hundreds of prospects rushed to find out how we did it – which earned us the right to explain and get their business.
3. What challenges developed as a result of getting funding – in terms of operational challenges, or business challenges as you grew in size – and how did the team tackle them?
Our company culture is to drive faster and faster, always. Funding didn’t create challenges for us. It created opportunities to amplify our vision. We are expanding quickly, in all departments and have to hire fast. One of the biggest challenges any startup has though, is to “hire right”. This is very important. As team grows, you have to be ready to not just hire more because you need more bodies. You need to be careful in hiring people that truly fit your culture. This is not easy to accomplish.
As a result of our notoriety, we have been crumbling under resumes. People from all types of background have knocked at our door. We feel very fortunate that so many brilliant people want to be part of our incredible adventure. However, I advise every entrepreneur to make sure they and their team have a clear understanding of their company values and mode of operations.
So, don’t feel pressure to bring in more people because your hiring plan says so. Hire right. Do whatever it takes to bring in the right talent. Even if it takes months. It will only be fair to your company. And it will be fair to whomever you hire.
4. At what point in the growth of the company did you find you had to change something fast? What was it and how did you do that?
We constantly have to adapt fast. Sometimes we need to adapt to new industry opportunities, sometimes its internal changes. The key here isn’t really a tactic – it’s more a “how your team works together” type of answer.
One of the most important changes we made was about 9 months ago when we deployed world-class sales and marketing systems. Our business was accelerating and we upgraded our sales practices and systems. This required major attention because, as my CEO often says, we needed to build for “galactic scale”, not just for the next phase. The key to our success here has been the fact that our team works, without second thoughts, without territorial attitudes or hidden agendas.
Hard to believe but some startups still deal with politics, at a very early stage. You can’t afford to do that. Doing a startup is about working with people you love, people you can trust, just like your family.
A friend of mine used to joke: “there is no “I” in team”. That’s true. But if you look hard enough, there is a “ME” in there. You’ve got to start with yourself. Trust your team unconditionally. Believe in the mission and the company. Drive as hard as you can, visualize the best scenario you can imagine and crush it!
Here’s a situation with which we can all identify. You’re out of the office working from your smartphone, tablet or laptop and you are desperately trying to find out a crucial piece of information quickly. Sure, you can navigate the web but wouldn’t be easier if you could just ask a question out loud, especially since the way we ask questions when we speak is a lot easier than trying to guess the right words to use in text form.
Swedish company Veridict has the answer – literally. CEO Alexander Seward describes its new app Nova as ‘a speech-enabled multi-modal service fusion platform’ which in essence means that it integrates different information and communications services and then promptly answers questions from the user. One of the biggest strengths of Nova is that it allows the user to ask powerful and information-rich questions in a similar manner to how someone would ask another human being.
Here’s an example. You can say things like “I’d like to go by train from Paris to Nice, sometime after lunch-time next Wednesday, but no later than six o’clock.” Within a split second, Nova will deliver suggestions of all trains that match those criteria. If Nova cannot find anything that matches all your preferences, ‘she’ (it’s a female voice) will make a qualified guess of the next best offer.
After that, the user can start talking about the train in more detail, by using implicit references, like: “Are there any later departures?” or “I want to leave earlier”. Nova also understands simple queries, like finding nearest restaurants or other points-of-interest.
Sounds simple, doesn’t it? But the reality is that Nova is the result of several years’ R&D by its engineering and computer science team. Says Alexander: “Nova is based entirely on our proprietary, innovative core technology for speech recognition and spoken language understanding. Our motto is that Nova should always provide the fastest way from thought to action.”
The company was formed in 2006 as a research spin-off from KTH, the Royal Institute of Technology in Stockholm, with the aim of focusing on advanced speech recognition products that push new boundaries in what is possible. Alexander and his three colleagues are all from a highly technical background and could see that there was a real gap in the market for much more intuitive and comprehensive speech recognition tools. Nova – currently in closed beta and due for launch later this year – is the latest development from Veridict and is set to bring the power of advanced speech recognition technology to the mass-market.
Even before it developed Nova, Veridict was doing pretty well. As well as private equity funding, the company is in the fortunate position of being in positive revenue thanks to its impressive roll-call of customers, including IBM, Volvo, Saab and TeliaSonera. It is currently expanding and is seeking additional investment to support new jobs, expansion into new markets and other areas.
The company has won several awards, including the VinnNu award from the Swedish Governmental Agency for Innovation Systems and won the first prize for the Venture Cup in 2006, beating another 300 or so Swedish companies for the title. More recently, Veridict won the The Swedish Post and Telecom Authority’s Innovation Award in May 2013 for Nova’s radio and media functionality.
But back to Nova, who is it aimed at? Over to Alexander: “Our end users are basically anyone with a mobile phone or a connected computer. Initially we are focusing on the Swedish market and primarily business-to-business, but we have strong ambitions to become a global player.”
Integral to this is the fact that Veridict has built its product suite on the Windows Azure cloud platform. Alexander explains why: “Azure is highly scalable, secure and reliable, so we know that we can expand our business to meet demand without any concerns. As well as the technology itself, the support we’ve had from Microsoft has been very good, not just the resources we get through being a BizSpark member, but also the people in the local Microsoft team in Sweden have been very helpful.”
Nova is already developed for Windows 8 and Windows Phone 8, but as Alexander is keen to point out, “We have put great effort in designing the technology so that it is extremely simple to port to other platforms and operating systems, including iOS and Android.”
Even though Nova is not officially launched yet, Veridict is already planning ahead, as Alexander explains, “On the Nova service platform we have dozens of new services currently under development, including live public transport information, navigation, taxi ordering and nationwide directory services. All of these will be accessible easily and quickly, using our natural language interface and natural language text input, depending on the user’s preference or situation. I really believe that this is the way of the future.”
We look forward to reporting on Veridict’s future progress and wish them luck with the launch of Nova.
On June 21, the Windows Azure Accelerator powered by TechStars will showcase a number of startups for its Seattle Demo Day. we will be there. To prepare you all for it, we are going to be showing off some of the startups ahead of time.
Here's one of them, a startup called OFunnel, which hopes to fully automate the lead generation and sales process, putting to bed forever the arduous task of developing sales from the cold call process.
We asked founder Kushal Shah a few questions about his experience.
How did you know you were ready to join the Microsoft Accelerator?
Kushal Shah: We had an idea and demonstrated the ability to execute. So we knew that with the right mentorship and guidance we could take our startup through its next stage of validation and growth. The Microsoft Accelerator provided us that opportunity with its awesome program. As we further talked to accelerator alumni and their experience, we knew this is the exact kind of expertise and help we need at our startup.
What do you hope to give your customers in three months?
Kushal Shah: We want to automate the lead generation process for B2B sales. From identifying the customers to talk to and get them plugged in right conversations and introductions, we want to ensure that our customers are not making cold calls anymore. In this 3 months, we are specifically focused on Marketing Technology Services.
Stay tuned for more information about the Microsoft Accelerator for Windows Azure Demo Day on June 21. You can follow us at Microsoft Bizspark on Facebook. Or, you can join the Microsoft Accelerator Facebook page for details.
This blog post is written by Mark Voermans, Audience Marketing Manager for Microsoft in The Netherlands.
One of the best things about my role here at Microsoft is mentoring some of the best start-ups in Europe. I get to see them at all parts of their journey, from the very early days when they’ve had a great idea but are still trying to work out what to do with it, through to their ‘wow’ moments. So, this week, I’m delighted to report that 7Write has just closed a seed financing round of $250,000, with a group of investors including Peter Davison (if the name’s familiar, he was a seed investor in PayPal). This Dutch company is also one of the start-ups taking part in the latest Startupbootcamp programme (the acceleration programme for startups (of which I’m a mentor).
So what’s so attractive about 7write? Well, like all the best start-ups, it appeals to something we all love and is a brilliantly simple but clever idea.
The 7write ‘writers studio’ allows users to easily write their book anywhere, anytime, online or offline on any device. Using the 7write ‘Authors Centre’ writers can self-publish their work with a single click. Let’s put some perspective on that: this is a market with an estimated 416 billion value by 2016 (source: PWC Media & Entertainment Outlook 2013-2017)
First in its Startupbootcamp class to raise capital, Dutch start-up 7write launched its closed beta just recently and has already started publishing books. One of its early adopters has already been featured in the Amazon top 30 best-selling short stories authors barely a week after publication. (And I can’t resist mentioning the fact that 7write have built their tool entirely on the Microsoft stack, including Windows 8, Windows Phone and Windows Azure).
If you’re in the Amsterdam area on Friday 28th June, see if you can get an invite to Startupbootcamp’s Demo Day: not only will 7write be releasing the latest version of its book platform, it will be a chance to meet some of the other startups taking part in the programme, plus we’ll have a couple of VIPs visiting us: Vice President of the European Commission Neelie Kroes and Queen Máxima of The Netherlands will be guests of honour at the event.
And, if you’re a start-up who wants to follow in 7write’s impressive footsteps, don’t forget that the deadline for the next Startupbootcamp (Copenhagen, focusing on mobile) is on June 30th!
PS: Interested in charting the course of European Startups of the future? Take time to vote now for the best BizSpark startup in Europe.
On July 4, twelve of the top BizSpark startup founders in Europe will gather in Berlin to talk shop and demonstrate their startup business models in front of a cast of leading investors and innovators from around the EU.
There will also be a moment set aside for the People's Choice Award, an award that goes to the startup that captures the hearts of fellow founders and anyone who follows the scene.
Currently, three startups are vying for the top spot.
Screemo has come up from its fourth place spot and is now firmly in the lead.
We have not linked to those startups here, but you should visit our voting page to get complete information about the startups so that you can vote.
Voting continues until July 4, so if you want to see your startup favorite win the BizSpark European Summit People's Choice Award, make sure to vote and to tell your supporters to vote.
In 2011, BetaWorks CEO John Borthwick and his management team gave back $27 million "and then some" to investors, according to a recent TechCrunch Disrupt interview (see below), and then they topped up the tank for another few millions in investment to keep building what is emerging as a suite of media products that sew together the social web. According to Borthwick "What we have now is a collection of things," that Betaworks is using to build that many might call the social web version of cable tv. In several interviews on the web, Borthwick surfaces this idea that many people turn to the social web in a very human way to use media platforms as a social "nexus."
They communicate ideas, they set aside time to comment on articles, and they create a searchable social web that produces information about people to connect to, and problems to solve, to name a few pieces of the social web puzzle. While most attention has been focused on Borthwick's purchase of Digg, and Instapaper, and the "growth" story around his investments, little attention is paid to what he is actually doing.
Is he creating a more engaged social web? Is he sewing together dozens of media properties to create a more seamless information and engagement experience in the web? Is he making our modern century's New York Times, which is actually more of a series of conversation feeds, rather than a single media property run by a publisher's bias or business interests? It's fascinating to watch, and we have many questions for him.
Douglas Crets will talk about this with John Borthwick this Thursday at 3pm Pacific, during another live conversation hosted by the folks at Microsoft BizSpark.
You can watch the Borthwick interview with Alexia Tsotsis here.
If anyone knows the story of Cable Cowboy, John Malone, they might remember that Malone built his cable empire by literally going around the country and using cable to link up disparate terrestrial tv affiliates into one massive tv offering. There were brutal battles. Much of what Borthwick says in interviews focuses on this type of story. He tells Tsotsis in his interview that "the market is characterized by big companies, and this incredible startup system... but I think if you look at the products out there, I think of them more like an ecosytem or a cluster of things."
He says that they are focused on "the whole platform" and "the entire puzzle," rather than the single most profit-optimizing piece of the puzzle.
The fact that BetaWorks was able to return $27 million, "and then some" to investors should tell you that building something holistic for the web can be profitable.
A one-man Microsoft BizSpark company from Hull is up against the likes of Barclays Bank with a dementia memory aid that he made for his Mum. myhomehelper beat off competition from over 200 candidates to be selected in the final of the AbilityNet Technology4Good awards.
Aimed primarily at those living on their own myhomehelper displays regular, random and timed reminders/photos to assist with daily activities and help relieve boredom, tiredness, anxiety and depression but doesn’t require any computer experience or knowledge from the user. It also helps family and friends by reducing the reliance on them while the video calling feature allows them to easily stay in touch.
The system was created by Hull businessman Kevin Marsch, Director of Simpla Solutions. “I developed myhomehelper to assist me in caring for my Mum who was diagnosed with dementia in 2010.” After receiving positive feedback about the system from care workers, Social Services and NHS professionals Kevin quit his job of 14 years in 2011 and formed Simpla Solutions to develop the myhomehelper further and focus on making it available nationwide.
It has been piloted across the UK and US for the last 18 months. During this time Kevin has received support from other Hull companies with KC providing free ADSL2+ connections to those taking part in the Hull pilot and Strawberry who provided free hosting and support for the web site. Simon Crosby, Head of Development at Strawberry said "When we heard from Kevin and what he wanted to accomplish we knew straight away that we wanted to help him. We think that startup companies need as much help as they can get and to help a local startup supporting a worthy cause struck a chord. It’s great that his work has been recognised in this way."
Kevin has been receiving praise for myhomehelper from all quarters. Former Secretary of State for Health and Labour MP for West Hull and Hessle, Alan Johnson, said “myhomehelper is a big idea developed by a tiny company. I applaud Kevin Marsch who has developed this concept in Hull. His hard work has provided help for dementia sufferers and a boost for British trade.”
It is thought that there are approximately 800,000 people living with Dementia in the UK, with over 7,500 in the Hull and East Riding area alone. These numbers are expected to rise significantly in the future. Kate Atkin of the Hull & East Riding Alzheimer's Society said of myhomehelper: "The Alzheimer's Society welcomes any innovation that uses technology to assist in the daily lives of people with dementia and their carer’s."
The Technology4Good Awards celebrate the hard work of people of all ages who use the power of computers and the internet to make the world a better place. They were created by AbilityNet, working with BT and a range of commercial and not for profit partners and sponsors. “Being selected as a finalist alongside the likes of Barclays Bank is great. It gives exposure to myhomehelper that I just wouldn’t be able to achieve on my own.” said Kevin, who has been selected in the Accessibility award category.
To vote for myhomehelper in the People’s Choice award go to the Technology4Good website http://www.technology4goodawards.org.uk/peoples-award-2013/ . Votes can also be made via twitter by tweeting #T4GMyHomeHelper – the more people tweet this, the more votes will be recorded. The winners will be announced at the awards ceremony, to be hosted by Mariella Frostrup, which takes place at the BT Centre in London on 4th July.