Product & Startup Builder

Filtering by Category: "funding"

Show me the money (or the pain)...

Added on by Chris Saad.
When you are in a startup that has any sort of visibility investors will always approach you. So having spoken to more than my fair share you start to hear certain patterns in their line of questioning. Some have already realized the growing problem that faces users as information explodes and attention dwindles. Some, however, ask a common investor question… “Where is the pain?".

Let me rephrase it in a few other ways…

What problem is your product solving? Is that problem causing pain in user’s lives? Is it so painful that they would they take time out of their life to try your product? Is your product so good, and the pain so great, that they would change their behavior to use it? Do they NEED you?

Because need creates demand and demand needs a supply. Sounds almost like drugs.

As Rod Tidwell would say from Jerry McGuire - Show me the MONEY!!! Or in this case, "Show me the pain, and the money will follow".

There are many answers to the question of pain when you are talking about a product like Touchstone. You can use all sorts of industry buzzwords that refer to trends that are emerging... things like 'the Long Tail’, ‘Publishing 2.0’, 'Participant Created Media', 'Syndication', 'Information Overload', 'Attention Deficit' and so on...

I have been guilty of using these phrases many times... As I have admitted before I have a problem.

I agree pain is important when it comes to building a high-growth startup - especially if you want to cut through the noise in this increasingly crowded marketplace where everyone is trying to make the next YouTube and Digg.

Cutting through noise, however, is exactly the problem. It is the pain. The volume is increasing. Can't you hear it? If you can't hear it then you are not listening. Chances are, however, if you’re reading this blog you are listening all too well.

You could argue that users - your typical Jon Doe - don't hear it yet. I would argue that there is a growing number of users every day that stop watching TV and start watching YouTube and BitTorrent. There is a growing number of users every day that are starting to read, write and remix the blogosphere and flickr and facebook and youtube and they are not going away.

Some could argue that those users are coming, but in the mean time John Doe is happy to read the local newspaper. Have you heard what's happening to the local newspaper recently? They're being decimated.

Mark Cuban recently suggested something new to save Newspapers - More Content and RSS.

Can you imagine it. Your local newspaper becoming a clearing house for every piece of gossip that happens down the road?

Forget newspapers; what about when every school, golf course, company, employee (etc etc) start publishing content and packaging it in RSS. No wait, they are already starting to.

That is rivers and rivers of content that an increasing percentage of the population is becoming aware of and coming to grips with. When you are drowning in a river, pain is everywhere.

Add to this the pain of keeping all your devices up-to-date and trying to fit some productivity in amongst all that news reading – and you are ready to black out.

What about Publisher pain. I (along with many others) have already mentioned how publishers (particularly newspapers) and broadcasters are hurting as users flee to online, time-shifted, personalied alternatives. Don't they need a way to strengthen their brand and monetize their users? Their shareholders are definitely feeling that pain.

In all this discussion of pain however, people have forgotten to ask about pleasure. But that's a post for another day.

Sounds like there might be a pain looking for a solution.

The reorganization around people

Added on by Chris Saad.
Over on Leafar's blog he has made a great post entitled 'Venture with Wit' that covers a number of topics including chasing VC/Angels who have the right understanding of the Attention Economy (we have found it is better to let them find us) and various factors that affect information flow.

These, according to Leafar, include: Content ("Hyperchoice Problem" - I love that name), Identity (An area where we have contributed APML) and Social (at which point he kindly mentions Touchstone as the best example of work being done in the area.)

I particularly like these quotes from his post:

From EquityKicker.

"As I’ve said before to me the web is re-organizing around people instead of sites"

I wrote about this in a recent post called "Aggregation is King"

Another great quote is from Umir

"Across consumer markets, attention is becoming the scarcest - and so most strategically vital - resource in the value chain. Attention scarcity is fundamentally reshaping the economics of most industries it touches; beginning with the media industry."

Ultimately though, users don't care about these market forces and factors of information flow. What they care about is a highly tailored experience that saves them time, delivers the right information on the right device and at the right 'Volume'.

If the web is reorganizing around people and Attention is the scarcest resource, then a tool that performs ultimate personalization by indexing, apply and managing user attention must be worth something to someone :)