THE DREAM IN ACTION

Most people know that Google’s precious search algorithm is a secret, sacred, thing that they’ve worked very hard to protect. In fact their behavior around that algorithm has been similar to Golum’s behavior towards his “precious” ring. You know, the one that will ‘rule them all’. This algorithm and others allow Google to provide very focused advertising based on your search terms.

In computing, an algorithm is an effective method for solving a problem using a finite sequence of instructions.

However, the way I see it, their dominance in providing web advertising using the “precious”, all machine, set of instruction won’t last forever. There are human powered systems that can adjust quickly for variables, change over time, and become increasingly “sharp” as they learn. Simply, they can learn better than just a computer. A great example of this type of human powered system is a NYC based startup Hunch. Effectively, they’ve created a system where they can collect an infinite number of decision trees, all generated by humans, and then predict future decisions based on passed decision sequences.

So, what am I getting at? Well, as you know I’ve been working closely in the local advertising space through my work with Foursquare and I can’t stop thinking about how large of an opportunity this is. If a bar or restaurant can advertise directly to the folks driving by as they’re deciding where to eat, that’s better than any billboard, radio spot, newspaper clip, full page magazine add, event sponsorship, Adsense ad in my Gmail or Google search, and I could go on… It’s simply the best possible advert you could get, as an advertiser or a consumer, unless I’m missing something. Here’s an example, when companies spend money on other ‘focused’ internet advertising they pay for say 100 impressions. This means that 100 people saw that ad, and the common click-through rate is about 1/100, even on the ‘focused’ ads. Now, what if you were able to directly reach potential customers who frequent your ‘type’ of establishment, fall within a very specific demographic, and only if they’re walking distance from your location!!! Right now you’re saying, “WTF are you serious…”, and I am.

With the blowing up of location based services like Foursquare, Loopt, Brightkite and a few others, this sort of data is readily available. People are using these services to share their location, their purchase preferences, their unfiltered thoughts about almost everything they do and businesses can learn A LOT from that. Now you see why all these nerds (me) get excited about data; because you can change the world with it. With this data you can turn industries upside down, and the ability to reach consumers in this intimate way is one of those opportunities.

It’s all a matter of who can reach the masses, who can create a product intuitive enough for “Joe the Plumber” to use. Google’s Adsense technology is fairly simple, but still local businesses don’t use it. The potential for human powered mobile, local, advertising is in the words of Austin Powers, “dead sexy”. My mouth is literally watering. I can’t wait to be a part of this movement.

Update: This post is going to be syndicated, and I made some additions/updates for that reason. 1/5/10

Have you heard of Waze? It’s a mobile app that serves the purpose of a Garmin or any other navigation tool except it has the ingredient those other tools are missing — remember the one that I keep telling you will start to integrate in any successful application — social. With Waze you can report traffic, speed traps, construction zones, and basically anything else that’s going on that might affect your drive or the decision of which route to take, Waze even builds it’s map because off social contribution.

Like any social app there is a catch-22 in that the more people play, the more valuable it will become. Waze says safety first because if the GPS in your phone tells the app that you’re driving it will disable your ability to text at all (very cool). Waze has made some changes recently in the way that it compells participation that you should take a look at… read on.

Here’s a few screen shots:

As you can see by the pac man-esque figure in the screen shot, Waze is a game. You earn points for finding new routes, trekking and exploring new roads, reporting issues, or findings along the way. It becomes fun if you’re engaged in it. Like any game if you’re on the outside you’re probably not going to get it or have that much fun, but if you dive in it gets addicting.

Now games are colliding; Foursquare is allowing checkins via Waze (as you can see in the screen shot above). There are even badges for checking in a certain amount of times through Waze. The online world is becoming a game, all interaction is rewarded and more and more we’re seeing those rewards offline, not just stuck on the web.

If you’re using Waze now I’d love to hear what you think of it. What are the best uses, what’s compelling and what’s boring, and are you checking in via Foursquare?

Below: Some of the official announcement about the badge via foursquare and the gaming mechanics in Waze

Waze recently added ‘road goodies’ – small icons worth bonus points – to the map in areas where the waze system has identified map problems. As users drive around to munch these ‘goodies’, the system analyzes the driver’s GPS data to automatically solve the identified problems, improving map quality, and therefore navigation, for all drivers in that area. The holiday version features wintery, new ‘road goodies’ including snowflakes, candy canes and small gift packages, scattered all over the map.

Taking the gaming aspect of waze even further, this version also features an integration with Foursquare, a new location-based geo-gaming app with a lot of buzz. Users of both apps can now ‘check in’ to various locations on Foursquare via the waze client – a feature that’s sure to become very popular – and even earn a waze ‘roadwarrior’ badge.

Here in Chicago we’ve been building a really solid group of users who are excited enough about Foursquare to tell their friends and the venues that they frequent. Last night we all met up at Lincoln Station in Lincoln Park and chatted about our experiences sharing foursquare and some of the challenges we’ve faced in spreading the word. If you’re interested in joining us next time or talking more about 4SQ, shoot me an email ryan@thedreaminaction.com

More Cupcakes was kind enough to sponsor the event and made some Foursquare branded cupcakes with a Mayor badge. Check out those crowns!

Quick thoughts on big valuations from pre rev startups:

There are a lot of folks that don’t understand why Twitter or other startups like them can be valued at such enormous valuations while showing minimal or zero revenues. I respect your skepticism. It’s tough to understand why these early stage start ups have millions of users but aren’t profitable. Please understand that most of them could create revenues if they wanted to, but just turning on the revenue spout isn’t most important. Turning on the revenue spout when all the pieces are connected properly is critical. I’d like to use this analogy to explain this further.

If your connecting a hose to the spout/spigot and you turn on the water prior to ensuring you have the hose connected properly, you’re going to have a mess on your hands, everyone’s getting wet and the process of watering your grass and using the hose is a failure. However, if you ensure a proper connection from spout, to hose, to sprinkler, you’re going to have a great experience, the grass get’s water and growth occurs.

These companies have already proven that they know how to acquire users, the water is running, now it’s a matter of connecting the pieces properly before they turn it on so that the combination of water (users), hose (business model), and sprinkler (team) are all connected properly to maximize their revenue opportunities.

Excuse errors, first post from my iPhone. (Update: added photo)

Update: Twitter is reported to be profitable after making search agreements

I was very motivated after reading Fred Wilson’s post on tenacity this morning. The long hour, late night, double time, alarm clock, graveyard, bloodshot eye, 3 coffee, 0 inbox, crush it, hustle, grind it out, and rock, bullshit…is totally worth it, and I love it. Not to mention it’s exactly what will, eventually, get me there. You know, there.

I’ve been pondering, in great detail, the challenges of getting “old school” brick and mortar business to better understand, then implement the enormous value that certain web based tools could provide for them. My first observation is that it must happen in that order, understand, then implement. My second observation is that it must be in their terms and must align with their ‘current’ business goals (I’ll elaborate on that).

A friend who works at a major consulting firm asked me for tips on how to use Twitter for his firm. My advice was, “You’ve got to understand your business goals before you have a hope of using Twitter (all social media) correctly”, and the same goes for bars, restaurants, and retailers. Here is what I would be doing if I ran one of these types of businesses…

I’m going to play the role of bar owner for the example here, the same principles apply to all.

1. Identify the value for the “key players”

There are two key players in this game. First and foremost are my customers, without them I’m dead so there interests should come first. My goal is to drive them to my venue. Second, are the investors or owners of the establishment. If an action pleases one and pisses off the other it won’t fly. Mutual benefit is critical.

Customers

It turns out that my customers are becoming passionate about things I don’t even really understand. It’s not productive to bitch out it, it’s my job to learn and get on their level. People are playing web based games that can literally determine where they go next. Customers are following their friends, broadcasting their locations, following friends recommendations, tips, and reviews to make consumer decisions and I have to be paying attention.

Venues

Turns out this crazy new game allows me watch! I’m invited to this party…for once. And because it’s location based I can track their interaction with my bar. Details like who’s coming to me, how often, who they’re with, and what they’re saying about me are mine for the taking. Not only does it let me sit on the outside and observe, they let me engage and play the game, even better, they let me make up the rules! Parker Smith wrote on this blog, ‘r+d’:

Foursquare provides a dead simple and engaging platform through which any small businesses can establish a loyalty program.

Venues can offer specials and determine the incentive for game players (who by the way are our most passionate customers) to come back, and spread the word.

2. Measure the value

Now that my eyes have been opened to the world of technologies that can literally change the way I interact, monitor, and reward my awesome customers, why not make that physical interaction a bit easier? Introducing Square: Twitter inventor Jack Dorsey just launched a biz that is a new way of accepting payments that, oh by the way, allow you to track customer spending. Here’s how Foursquare and Square play well together… (diagram from Hutch Carpenter)

The social incentives remain on the Foursquare side, it’s fun, and people are rapidly spreading the word. Now, from a transactional standpoint, I want to see what kind of $cash$  this is bringing in and revolutionize my conversion and merchant process and significantly increase my visibility to all of it.

Now by using this tiny device that plugs into an iPhone (or another smart phone soon) and can accept credit card payments, I know who’s coming (from Foursquare & Square), I know who is with them (from Foursquare), and I know how much is being spent (from Square), and I know how often they come (from Foursquare & Square). The ultimate customer monitoring, visibility, and analysis has arrived. It’s just up to me to keep my eyes open, continue to learn and use the tools available to me.

Conclusion

I better understand my business goals of attracting and converting customers and I’m using the tool that they are having fun with to monitor and act on their behavior. That’s mutually beneficial. I’m not selling them anything they don’t want, I’m connecting on their level and learning more about them. I’ve taken the time first to understand why these tools will help my customer and me and I can easily implement it. Very simple, very engaging, very affective.

It’s almost as if Foursquare was meant “for Square”.

image via flickr

I came across Andy Swan via Fred Wilson’s blog a few years ago and have followed casually for a while. The other day he wrote a post (below) that might be his best. Every once in a while you need a kick in the ass and this was it…enjoy. If you have comments on the post please leave them on his blog, not here.

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An endless fountain of ideas.  I’ve lost count, but I’d guess an average of 2.5 killer businesses come forth from your brain on an annual basis.  Unfortunately, they get mugged by reality and disappear into the vapor of lost dreams just as quickly as they were formed.

Obviously, there are several reasons for the canyon between your “entrepreneurial” vision and your accomplishments:

1. Geographic location — no one where you live can code or invest like the hippies in San Fran.  Why fight that?
2. Debt obligations — Far be it from you to actually take your standard of living down a notch while trying to do something “revolutionary”…..meanwhile, men jump on grenades.
3. Muted enthusiasm — If your friends aren’t instantly enamored with the 6th complex idea that you describe without having built anything yet, how will anyone else “get” your brilliance?
4. Idea pirates — Obviously, your idea is so unique and valuable that everyone will steal it, take it to the hippies in San Fran and have it built and funded (but not as good) before you finish the sentence.
5. Family — Apparently you married someone that needs a lifestyle that ratchets up slowly and predictably in order to love and support you.  And, ya….your infant children would be devastated if you put money into anything other than granite counter-tops and a paper thin computer with a glowing fruit on it.

The list goes on and on.

You’re screwed.  All that genius and no chance to execute on it.

Poor you, born into the country that rewards, encourages and celebrates entrepreneurship more than any other in human history.

You are an old man in a lazy-boy, so damn comfortable you’re afraid to move.

Cruise-control into the coffin it is.  Enjoy.

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In a related tone, Mark Cuban wrote an amazing post titled, The Sport of Business, that is equally as inspiring and really shows the cut throatness that “it may” take to dominate in business. He surely has.

photo via flickr

For a while now I’ve been writing about Foursquare customer development, sales, and business development. I’ve written about my experience as a foursquare sales rep and the challenges of selling to local venues. Now, I’d like to share some of the details of my newest project and what we’re going to accomplish.

I’m extremely excited for this project because of foursquare’s opportunity and potential to change the way business is done.  The challenge of reaching local venues is incredibly difficult and the only successful method to date has been to deploy a very large sales force. Yelp and others have used this method but in my mind traditional methods are not very exciting. What if there was a new way to sell at the local level? What if you could reach venues through their customers and create a win win experience that benefits every party? The possibility of that win win is very exciting, innovative, and exactly what we’re going to build with the Foursquare Street Team.

In the movie ‘The Patriot’, Mel Gibson builds and leads a militia to attack the British in a way that they had never seen, on the ground and by surprise. The normal sales approach has been the equivalent of the “line up and shoot at each other approach” of the pre-American Revolution British Army and what we’re going to build is a quick moving and innovative militia. This “street team” is made of up passionate foursquare users and passionate customers who want their venues to benefit from the value of being connected to customers like never before.

Our next step is forming this street team and empowering them to show venues the value of foursquare. If your an excited foursquare user, see the value of the platform for venues and users, I’d love to speak with you. We’re going to kick this effort of initially in Chicago and expand from there, so please get in touch. [ryan@renliv.com]

Here’s where we are now.

Existing Chicago Foursquare Promos

@ Chaise Lounge: Show that you’ve checked in on Foursquare and get 10% off on food.  Show your waiter to redeem!

@ Dragonfly Mandarin: Show that you’ve checked in on Foursquare and get 20% off every 6th visit!  Show your server to redeem

@ Piece: Show that you’ve checked in on Foursquare and you’re mayor and get your second pint on us! You can also follow Piece on Twitter

@ The Drawing Room at Le Passage: Show that you’ve checked in on Foursquare to the Drawing Room and get a free dessert with the purchase of an entree, small plate or drink. Show your waiter to redeem! Follow the Drawing Room on Twitter

@ David Burke’s Primehouse: Show your server that you’ve checked into David Burke’s Primehouse on foursquare and we’ll send out a complimentary chef’s choice appetizer to add to your breakfast, lunch or dinner. You can also follow David Burke’s Primehouse on Twitter

@ J Bar: Show your cocktail server or bartender that you’ve checked into J Bar on Foursquare, and receive 2 cocktails for the price of 1 before midnight.

@ Metropolis Rotisseria & Annettes: Show that you’re mayor of Metropolis and get a free brownie!

@ Meze Tapas: Show that you’ve checked-in on Foursquare and get 20% off meal with purchase of a pitcher of house sangria.

@ The Food Feastivals: Show that you’ve checked in on Foursquare and get one free admission per paid $10 admission!

@ The Hunt Club: Get a free shot with a foursquare check in, show to staff to redeem!

@ The James Hotel Lobby Bar: Show your cocktail server or bartender that you’ve checked into The James Hotel Lobby Bar on foursquare and receive 2 cocktails for the price of 1.

@ Wow Bao: Show that you’re mayor of Wow Bao on Foursquare and get a free 6-pack of bao!

You can follow Wow Boa on Twitter

@ Wow Bao – Chicago Loop: Show that you’re mayor of Wow Bao on Foursquare and get a free 6-pack of bao!

@ Wow Bao – Water Tower: Show that you’re mayor of Wow Bao on Foursquare and get a free 6-pack of bao!

Events are the things that bring us together, in real life, around a specific topic. Whether it’s a Victoria Secret Fashion Show, or a Monday Night Football Game, or an app launch party, people collect together in real life or with a shared common experience like watching the same TV show at the same time. Increasingly, the discussion around those events is becoming interesting and profitable.

Google and Bing, who do search better than anyone have realized that the real time conversation is incredibly valuable, which is why they both have agreements to use Twitter data — live conversation information.

I had a conversation with Justin Shaffer this week and he described the service as “collective storytelling”. It brings people together around an event so that they can discuss it. When I checked in at Wrigley Field for a Cubs game, Foursquare told me there were 8 others at the game who had also checked in. Now Hot Potato allows the people at the game, and the ones at home watching in engage in discourse.

Within Hot Potato you can add comments, images, or video to add to the conversation creating a powerful social network of people who experiencing something together. The service can currently be reached through their website but is optimized through the iPhone app (they’re working on other app platforms). Hot Potato also leverages Facebook Connect so no need for yet another username and password. When it comes to sharing the conversation and drawing others in, you can share the updates to Facebook or to your Twitter stream.

Where the Twitter hashtag does a decent job of measure how many mentions a topic has gotten and picking up trending topics, Hot Potato allows for a better use of that conversation content. Most people have heard the phrase “content is king”. That’s wrong now. Shaffer pointed out in our conversation that content is losing out as the most important aspect of experience. Now the social interaction is king. The conversation that is building around topics is more important that the event itself in some examples. Would anyone care about the Tiger Woods fiasco if people weren’t talking about it like they are? Doubtful. The interaction and conversation is now the most important aspect and Hot Potato now curates that better than anyone.

iTunes link to app here

Hey have you checked out Foursquare?

Is that the Twitter thing?

You can use Twitter to tell people where you are, via Foursquare. So not really a Twitter thing…

Go on…

I recently had this conversation with a non techy friend of mine and it made me think about how quickly things are moving on the web, and how God awfully confusing it must be for someone who doesn’t follow it like we do. That’s why when I heard the quote, “In 2009 if you’re not confused you’re not paying attention” from Bob Johansen of Institute for the Future, it made me stop and think. He really is onto something. When @msuster retweeted that today I could help but follow suit because of how well it explains what is going on.

It’s important for us tech folks to take a step back and put ourselves in the shoes of the non web savvy folks out there and figure out how to relate our fast paced industry to the rest of the world. Let me break it down in one statement: These aren’t just fads, toys, or goofy social networks, these are the tools that will make our lives easier in the future. Over time the good ones will rise and the less useful ones will die, but paying attention to how they develop will give us the understanding we need to utilize them and succeed.

For the critics, you’re absolutely right that you don’t need to pay attention to all of the noise out there, it’s impossible to. But what you do need to do is learn to pick up on the ones that stick and don’t be late to the party. If you’re just now joining Facebook you’re late. It’s going to be critical to at least try to comprehend these trends so that you can stay competitive no matter what business you’re in. Pay attention to the future no matter how confusing it may be.

image via flickr

Costa Rica

Costa Rica is one of the most beautiful countries that I’ve ever been to. The combo of the almost year round weather perfection, combined with more activities that you can fit in to a 2 week long vacation, make it possible the perfect honeymoon destination. @Mollstar and I literally had the time of our lives with plenty of relaxation but enough adventure to never get bored.

We stuck pretty strictly to a one day in and one day out schedule. As fun as it may sound, we both knew that too many days just lounging around the resort drinking Pina Colada’s would get old for both of us pretty quick. Here are some of the highlights…

Crazy Ass Pizote Families

Horseback Riding/Rafting/Zip Line/ Volcanic Mud Bath

No horse back or rafting pics. Sorry.

An Awesome Trip to Volcano Arenal and The Springs Resort

A Day trip on Thanksgiving to Nicaragua

And Some Amazing Animals!