Paul Pics A Plum

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Picplum
So I have known Paul Stamatiou for nearly four years now. We met at Atlanta Startup Weekend in 2007. He pitched Skribit at that event and my thought when he did so was great idea, we can build it, not so sure about the market. The market turned out to be small. 

About a year ago Paul packed up and moved West. He ended up working on a Y-Combinator startup called Notifio. That one I did not get at all.

Well earlier this summer we shut down Skribit and Paul got involved with yet another startup (seems like one of the big benefits of YC is safe landings). It went through the monster size YC class this summer. I had no idea what he was doing except working hard. 

Last week I got a note from Paul. Essentially said, go take a peek at this. This was Picplum. Picplum is aiming to be the easiest way to send photo prints. Nice service and I can see how this would be a big winner with parents of young children. Those grands in faraway places really like to have prints. 

Picplum is a monthly subscription service starting at $7 per month. You upload or email them photos, add a list of recipients and they automatically print and mail photos. Automatically being the key term.

Picplum has an interesting back story. They acquired the assets of previous YC company Picwing, and took over its printer relationship and initial user base. It seems that another Paul, Paul Graham, was a big fan and user of Picwing. The Picwing founders had gone off in another direction and PG was looking for someone with some passion to take it over. As I recently minted uncle Stamatiou was just the guy to do it.

The Picplum product is built fresh from the ground up. But they have a built in customer base and lots of interesting data to help them to understand the business.

PicPlum is offering a special to the readers of FoG which enables you to give the service a whirl by offering your first batch of photos free to two receipents. Here is the landing page to use the promo code.

August 15, 2011  |  Comments  |  Tweet  |  Posted in Accelerators, Startups

The Conference Room Table Interview

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So we are hiring a lot of folks at Half Off. It's all across the board. Accounting, customer service, development, marketing, and sales. Our company wiki has 36 people in the directory now, but I suspect we have more then 40. And from time to time we do a little cross department interviewing.

Such was the case when James Nail came to me and asked me to interview one of the more semi-technical online marketing experts we were looking to bring on. I assumed that if James liked the person they had the specific skill set needed to fill the role. As I agreed to interview her I asked if it would be ok to do so while building the conference table in the room affectionately known as The Microwave. The Microwave gets a little hot in the afternoon. And the afternoon it was when I met and escorted this new recruit and introduced her to the task at hand. 

It was a team building exercise. In The Microwave. We worked together well. She read the instructions, told me what to do, and lent a hand in the assembly as I asked her a bit about her background. After about 45 minutes of this I told her I really did not have any more questions. I also told her she was free to go if she wanted. Then after a noticeable pause added "or that could be the real test of this interview."

It was. She passed the test. She stayed and finished the conference room table together. We hired her. And she and I are going to autograph that table one day with a Sharpie.

August 5, 2011  |  Comments  |  Tweet  |  Posted in Half Off Depot, Management

The Rabid Pack

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I am a member of the Jason Nation and over on the Launch blog Mr. C has a nice article. The overall post itself is about management misdirecting employees. While I don't always agree with everything Jason says or does he nails the startup sales equation. 

Dealing with a rabid pack of sales wolves is perhaps one of the hardest management challenges in business.

Sales people are an odd group of mercenaries, and the best ones seem to have a perverse sense of competition and drive that is unique in the employment landscape. They are very aware of incentive structures and seem to love being put in them.

They like having a percentage of sales targets to hit, and levels and bonuses associated with certain milestones. The more complicated a structure and game, the more turned on and tuned in they seem to become.

Great sales folks seem to look at life as this huge casino or Zynga game, where they are placing 20 bets on five different tables.

I've long learned to embrace this dynamic at new companies by setting

a) absurdly low base salaries (think $30K to 60K)

b) absurdly high commission structures (10% to 25%)

Why?

It's a filtering mechanism for me to get the most insane, rabid and self-confident sales folks — and filter out the lame "professionals." The times I've put up six-figure bases and the standard 3% to 5% commission structures, I've gotten the weakest, non-rabid, meek sales executives who are more concerned with driving almost fancy cars, wearing fine clothing and having lush expense accounts than their actual commission structure.

Those sales folks are death at startups. They lack the drive and creativity to sell new products  because they are — largely — old, fat dogs.

At some big company with 300 sales folks, they're great for managing existing accounts. At a small company with under 10 sales folks, those "professional" sales types are the kiss of death. They need everything handed to them on a silver platter, and they can't close deals because of the product, the marketing kit or the fact that we're doing something new.

In fact, two sales folks I gave the low-base-and-high-commission structure to easily broke $500K in *commissions* for me in the first two years of the Silicon Alley Reporter and Weblogs Inc.

They both made fives times what I made as CEO — and I loved it.

Startups need hungry hunters that want to kill.

July 22, 2011  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Management, Startups

Recruiting Via Direct Message

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So Half Off Depot is looking for a social media/community manager. I am the hiring manager for the position and have been having a bit of a struggle in finding the right person to fill the role.

Last night I took the matter into my own hands. I went into my Twitter account and started going through the list of people that I follow. There are about 300 or so of these folks. I follow folks that I think are interesting, fun, and smart. In some way we have a shared interest.

I started looking for people that I follow that have a shared interest in social media and fit the profile of what Half Off needs. I found five that I thought would be good candidates. I sent them direct messages. 

The result. Two meetings setup for this weekend (I like people that are willing to meet on the weekend and set up such meetings via social messaging) and two more in the planning stage.

Twitter can be a pretty effective recruiting method.

July 19, 2011  |  Comments  |  Tweet  |  Posted in Half Off Depot, Networking, Social

Moving Forward At All Times

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Part of a email to everyone at Half Off Depot, a growth phase startup where I work.

Here is my offering for the day. This one pertains to the lesson of General George W. Patton, and I'll call it: "Don't be a jackass!"

To paraphrase one of Patton's standing orders, he told his troops, "I never want to hear that we're holding our lines. We will be moving forward at all times."

Well, soon enough, his army was in battle and on the march. Suddenly, it came to a grinding halt.

Frustrated, Patton ordered his driver to take him to the front of the column to see what was holding them up. When he arrived, he found that the troops and all their tanks and vehicles had been stopped dead in their tracks by a peasant's donkey and cart that were blocking a one-lane bridge. To his utter disbelief, Patton found that several of his men were struggling with the donkey, trying to get it to move. Without hesitation, he drew his pistol, shot the donkey and had his men throw it over the bridge.

As a General responsible for the lives of thousands of men and tasked with winning a war against an evil foe, Patton knew that he did not have one minute to spare.

How does this pertain to us? We will be moving forward at all times. Don't be a jackass.

Pretty good story if you ask me. I for one will indeed be moving forward at all times.

July 12, 2011  |  Comments  |  Tweet  |  Posted in Half Off Depot, Management, Startups

Who Gets Shot

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When I joined Half Off Depot I was part of a senior management team that all came on board the same day. It's a great team and we are making great progress, but when you bring on a bunch of new leaders at the same time it can create some general confusion. Confusion is bad. Clarity is good.

When it comes to roles and responsibilities a way to add a little clarity is to think in terms of who gets in trouble if something goes wrong (which is very different from who gets credit when something goes right). I call this who gets shot. It is an interesting way to think about things.

In a growth phase startup you have various people that lead various functional groups and regardless of how well the startup is doing there are always pressure points. An area that might be lagging the rest in some way. Imagine the team sitting around a big conference table. Imagine a little tank sitting in the middle of that table. The tank turret is always rotating and turning toward someone. The key is to solve the pressure point before the turret stops rotating and the gunner has time to take aim.

If we are not moving out product fast enough or the product we have is not functioning properly the turret turns to the CTO.

If we are not adding subscribers at a fast enough rate and acceptable cost the turret is turning to the marketing guy.

I was brought on to scale Half Off's sales effort. Getting our sales team more productive. Expanding into new markets. Doing bigger deals. If we do not meet our overall revenue targets the turret turns my way. Don't fix it fast enough I am the guy that gets shot. And it flows on down. Market managers miss their numbers? Here come the tank. Sales reps don't generate a certain amount of revenue. Here comes the tank. As a leader it is my role ensure that as many of the troops as possible make it through the battle without taking a bullet. I don't want anyone to have a gun pointing at them.

I used the tank and gun analogy to explain things to my team. Instant clarity. Communication is key to clarity and sometimes little analogies help communication.

Tanks and guns. Carry on.

 

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It’s Hard To Blog Right Now

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It's been 17 days since I have written a blog post. It's hard to blog right now.

It's not because there are not interesting things going on. There are. Tons of interesting things. But they are a little bit hard to write about. They are a little bit hard to write about for two reasons.

One is that much of what I am working on is very strategic in nature. It's interesting and it's fun but I can't really tell the world about it.

Two is that much of what I am working on involves people. It's interesting and challenging but my objective with this blog is not to talk about specific people challenges that I face.

Anyway. I am going to strive to do better.

July 10, 2011  |  Comments  |  Tweet  |  Posted in Personal

Correcting the Cat

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Over on the Groupon blog Groupon the Cat is creating quite the ruckus. It seems like Mr. Cat wrote a little blog post about "The Groupon Guide to the "Quiet Period." In it Mr. Cats states:

The “Quiet Period” is the time right before a company “goes public,” during which it is legally prohibited from saying anything to the press that may make the company look “good,” “successful,” or “not currently on fire.”

Not that I get great joy pointing this out but Mr. Cat is wrong. During the quiet period a company is indeed not allowed to publicly say anything that might be considered as pumping the offering. However quiet periods are not restricted to the time before a company "goes public". They generally apply anytime a company issues a new public offering regardless of if that offering is the initial public offering or a subsequent offering.

In 2005 the Security and Exchange Commission modifed the quite period rules so that they did not fully apply to "well-known seasoned issuers". Well-known seasoned issuers must either have a publicly traded market capitalization of at least $700 million or have issued at least $1 billion in securites other than common equity over the past three years. These well-known issuers represent approximately 30% of listed issuers and accounted for about 95% of U.S. equity market capitalization. 

So regardless if it is your first public offering or your tenth, if you are in your registration period you are required to be quiet. Even if you pretending to be a cat.

June 22, 2011  |  Comments  |  Tweet  |  Posted in Business, Current Affairs, Fun, Stocks

Deal Facts

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Utpal Dholakia of Rice University has been studying the deals market for some time and a few days ago released a new study, How Businesses Fare with Daily Deals: A Multi-Site Analysis of Groupon, Livingsocial, Opentable, Travelzoo, and Buywithme Promotions. In the study Doctor Dholakia examined the performance of daily deals run through the five major companies listed above in 23 US markets. 

While I have not had a chance to read the full study yet ClickZ has a great overview of the findings:

  • 20 percent of deal users are returning for full-price purchases at restaurants, bars, salons, and other retailers
  • 36 percent of deals users spend more than the voucher value when visiting a merchant
  • 22 percent of them never redeem the vouchers they've paid for
  • 55 percent of businesses reported making money on their promotions, 27 percent lost money, and 18 percent broke even
  • 48 percent of businesses planned to run another daily deal promotion, 20 percent indicated they would not, and 32 percent didn't know for sure
  • 70 percent of marketers in special events, health, and services made money on their promotion. 
  • 44 percent of the restaurants surveyed financially profited from the promotion, and only 36 percent of them intend to run another daily deal

The was been a lot of chatter about how there is no way a business can make money with a discounted deal. This study shows what I have been hearing from merchants, properly structured deals work. With 73 percent making money or breaking even on their promotions deals are an online marketing method that works.

June 16, 2011  |  Comments  |  Tweet  |  Posted in E-Commerce, Internet