Mr. Affleck, Movies Are Like Start-Ups

September 15, 2010

Last night I was lucky enough to be invited to “The Town” premier at Fenway Park.  I was surrounded by celebrities, sitting within 10 feet of Rebecca Hall, Jon Haam, Blake Lively, Jeremy Renner, Matt Damon, and Ben Affleck… pretty cool!  The movie was great, and the presentation at Fenway made the experience even sweeter.   I’ve been fortunate enough to attend two other movie premiers (“Spider-Man 3” and “The Boondock Saints II”), and each time it becomes more evident that creating a movie is fantastically similar to starting a company.

When starting a business an entrepreneur must find the equilibrium between the team, resources, and opportunity, while using the business plan to bring them all together.  Often the sequence is: entrepreneur identifies the opportunity, validates it with a proof of concept, creates a business plan, builds the best team possible and acquires the needed resources to pull it all off.  This is a very basic outline taken from the Timmons Model for Entrepreneurship.  Repeat entrepreneurs tend to have established relationships and reputations that attract stronger team members and easier access to resources (financial and other).  The process for producing a movie is very similar.

Movies always start with an opportunity.  One way to validate an opportunity in the film industry is to examine recent box office numbers for similar types of movies.  Using “The Town” as an example, Boston-based thrillers have been very popular over the past seven years; “Gone Baby Gone” (2007) grossed $35M*, “The Departed” (2006) grossed $290M*, and “Mystic River” (2003) grossed $156M*; being three years removed from the most recent Boston-based thriller the market seems primed for the newest entry.  With an opportunity identified the movie producer (the entrepreneur), must create the script (business plan), to obtain the resources and build a team.  “The Town” had many options for creating a script, but by using a proven concept as an outline, the award-winning novel “Prince of Thieves” by Chuck Hogan (winner of the 2005 Hammett Prize), the risk was lessened.  With an opportunity identified, a script in-hand, and a proof of concept, the producer must build a winning team to acquire the needed resources and make the script into a real live movie (similar to making a business plan into a real working company).  A producer that “attaches” a big Hollywood name to his script will attract other big names (building the team), which attracts resources.  If the producer, or another member of the founding team, is a big name (repeat entrepreneur) then the quality of the team and amount of resources available increases.  Imagine if you used your business plan to attract Bill Gates as a board member of your start-up, think about how easy it would be to build your team and obtain the necessary resources.  The same rings true for “The Town”, with Ben Affleck as a founding member of the team (he wrote the script and directed the film), attracting Blake Lively and Jon Haam (two very popular actors whose names on the billboard will simply attract fans) was not too difficult.  With the all-star talent line-up acquiring the needed resources ($37.5M according to Wikipedia) must have been relatively simple.  Following the sequential path for “The Town”, a seasoned entrepreneur (Ben Affleck), with a tested business plan (script based on an award winning novel), strong team (popular movie stars), and sufficient resources ($37.5M) the business (movie) now exists.

Even though I’ve pled my case that movies are similar to start-ups, bear-in-mind I’ve only examined the most basic elements of the relationship at their earliest stages.  Execution is key.  A business plan outlines the holistic nature of the company, while the script is only one element of the entire film process (which includes marketing, editing, distribution, etc.). I draw the similarities between start-ups and movies by viewing business plans and scripts as entrepreneur and producer’s tools to identify the opportunities, build winning teams, and obtain the necessary resources.  “The Town” was able to build itself in a similar fashion as a business, and like many businesses founded by serial entrepreneurs, I’d bet my money that Ben Affleck hits a homerun with this one!

*Box Office Mojo (http://boxofficemojo.com, 15 September 2010)

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Why Facebook Apps Suck

August 16, 2010

Young Passionate Entrepreneur (YPE): “I’ve got this great idea and I’ve done the research to prove that the market is $X,XXX,XXX,XXX big!”

Seasoned Internet Professional (SIP): “Sounds interesting.  What’s the idea?”

YPE: “A website that finally lets people _______________ (fill in the blank).”

SIP: “Pretty cool idea.  How do you plan to scale?”

YPE: “Easy.  Events, SEO, AdWords, and connecting to Facebook through Facebook Connect.”

SIP: “Sounds like you’ve done your homework, but your idea SOUNDS LIKE A FACEBOOK APP.”

I’ve heard “Sounds Like a Facebook App” so many times, but are we really thinking the phrase through before speaking? Why does any new website that connects friends via the web always “sound like a Facebook App”? What if LinkedIn, Twitter, or Foursquare (all naturally sound like Facebook Apps) started as Facebook Apps? Would any of them be where they are today, even if it were just to test the concept?  There are very few success stories for Facebook Apps other than Zynga videogames, which are the rare exceptions, but remember these are videogames, not Web 2.0 sites.  Converting a website concept to a Facebook Application will set it up for failure because people don’t trust Facebook’s sharing of private information with 3rd party developers and Facebook Apps require users to commit to providing their sensitive Facebook information before allowing users to test the applications.

Facebook has become an information depository; users blindly place all of their personal information and data (no matter how sensitive) in their Facebook accounts, only controlling how others access this information via their Privacy Settings.  Unfortunately, Facebook has demonstrated a pattern of privacy gaffs, creating an almost tangible distrust with its users.  With updated Privacy Settings on an annual basis, and with new settings defaulting to “Public,” Facebook users don’t know how to 100% protect their sensitive information.  Even though, users are presented with a warning of the exact information that will be shared with applications, they often ignore or distrust them.  When connecting to a Facebook Application users often feel like they are rolling the dice, hoping that the information they view as sensitive remains private.  For a user to risk sharing their private information with a random developer by connecting to an application a great degree of social proof must be demonstrated.  According to the social proof hypothesis, Facebook users won’t sign up for an application unless they see their friends signing up.  With all the noise going through newsfeeds, it will probably take more than 1 (probably close to 4-7) friends signing up for an application before you notice.  The obstacles for a Facebook Application to gain the exposure needed to provide social proof for a user to consider providing their private information is immense.  One may argue that the same exposure obstacle exists for off Facebook applications that connect to Facebook via Facebook Connect, which is different because of the ability to sample the application (build trust) before committing to providing sensitive data to the developer.

Facebook Applications require users to provide their personal information before trying them out.  When a user identifies a Facebook App that seems intriguing, he/she may see screenshots of the application via the application’s Facebook Information page, but in order to tryout the application permission must be granted through the Request for Permission pop-up box. The Request for Permission pop-up box is where users usually change their minds, and decide that it is not worth the risk of giving away personal information to a 3rd party developer for an application that they haven’t even been able to try, and click the “Leave Application” button.  With Web 2.0 sites, users often are only required to enter a username and password to gain access, and may add additional information to their user profiles at their discretion.  Once the Web 2.0 site proves itself useful and trustworthy, the user may select to share their use of the Web 2.0 site by connecting with their accounts through Facebook Connect.  Connecting with Facebook Connect allows the Web 2.0 site to communicate with the users Facebook profile, allowing the user to share information from the Facebook user account with the Web 2.0 site and vice versa.  In many cases, users’ of Web 2.0 sites may share what they do on the Web 2.0 site through their Facebook newsfeed (which may even include a link to the Web 2.0 site) after connecting to Facebook on their terms via Facebook Connect.  People understand that they must be more responsible with their Facebook information, and are becoming more selective with whom they share their information with; thus developers must first build trust with their users before asking for their sensitive information; a process that Facebook applications DO NOT support.

Selecting to go-to-market with a Facebook Application rather than a Web 2.0 site that uses Facebook Connect is not a small decision, and through the proper user behavior analysis it becomes clear that Facebook applications limit adoption because users are not willing to share their Facebook information with 3rd party developers before trying applications on their own terms. Finding examples of non-videogame Facebook Apps that have a large number of users has proven difficult.  I welcome your comments regarding Facebook applications and what types of web applications are best fit to be tested and introduced as Facebook Apps rather than Web 2.0 sites.


Entrepreneurial Innovation

March 2, 2009

Wow. I haven’t posted since 2008!!! I will not make excuses, I love blogging, and I am excited to get back into the groove. So much has happened over the past 2 months like the inauguration of President Obama, Sully the Pilot’s heroics, and hitting a 10 year low in the stock market. Over this period I’ve had some epiphanies, one which I would like to present today… that being, innovation is incremental.

Innovation is Incremental – Since August I’ve been working with a team of engineering students to develop a mobile application for a Fortune 500 company. We’ve had our ups and our downs. Recently we had an internal discussion regarding our goal; the question was if we needed to create an innovative interface or an innovative application? The application we began developing was clearly an innovative interface; all the content existed, the basic idea and concept is widely available via other applications, all we were doing was presenting it in a “cooler” manner. I hated this application, and voiced my opposition on the grounds of lack of innovation. Before revealing the idea to the sponsor company, we had an internal review revealing our application to a group of PhD’s. During the review the innovative interface application was bashed by the PhDs also due to lack of innovation. We had a list of 8 other applications we created, 3 of them which I considered innovative. The presented application was dumped. Our new task was to choose 1 of these 8 remaining ideas using innovative application as the main criteria. This is when I realized innovation is incremental.

People used mail before electronic mail (email), listened to Walkmans before iPods, and instant messaged before twittering. These are incremental innovations. While selecting a new mobile application to develop I was unaware of the incremental nature of innovation. I campaigned for the most innovative of the 8 applications, but my team pushed back saying the idea is a new paradigm, which is bad. New paradigms change behaviors, which is a risky endeavor (especially for a conservative Fortune 500 company). I became aware the most innovative application may be ahead of its time, and too far a jump from the current market. Eventually we settled on an application using current content, presenting it not only in a “cool” manner, but also in a different manner by mixing medias to create an interactive experience unlike any other. The mobile application we are moving forward with is an innovative interface and an innovative application, but without creating a new paradigm. The application marries two behaviors together in a manner never done before to create an incremental innovation with great potential. Taking the innovation is incremental approach facilitates us in delivering a great mobile application.


The Power of Numbers

October 15, 2008

We’ve all heard it, to assume is to make an “ass” at of “u” and “me.” Making business decisions based on feelings, preferences, and observations are marred by biased assumptions. Strong businesses decisions emerge from fact; and there are no stronger facts than numbers. Quantitative analysis is essential to business decisions; it’s the power of numbers.

Quantitative Analysis – I have a simple process for performing quick quantitative analysis.

Step 1) Identify the Desired Destination – Know where you want the numerical data to take you, why the data will take you there, what the data can tell you, and how the data is working. Without knowing your destination, you may quickly get lost. Know your destination.

Step 2) Collect and Organize the Numbers – Finding the numbers is not easy. Choose whether to manually gather the data through surveys or to collect it from published (or unpublished) sources. If you encounter trouble collecting data, speak to a librarian (they are expert data gatherers and can be your best free resource). Once you have your data, organize it properly and you will get to your destination efficiently. Organizing your data can be as easy to choosing the order of the columns or as difficult as creating tables within Excel.

Step 3) Manipulate the Numbers – Now that the collected data is organized, can you get to your destination with the data in its current state? If not, then figure out what needs to be done, and do it. Make sure you don’t ruin the value of the numbers with your manipulations.

Step 4) Get the Facts – Use your answer to the question, how is the data working to get to your destination?, to apply calculations to the numerical data (collected & manipulated). The results will provide you with facts. These facts will be used to make your decisions.

Step 5) Don’t Take the Results for What They AreFinding patterns in large outputs is like searching for a needle in a haystack. The output of facts may seem sufficient to make your decision, but pictures tell a thousand words…

Step 6) Graph the Results & Make the Decision Graph the outputs. Graphical dashboards are valuable components of decision making because they show patterns that one might miss by just looking at the raw numerical facts. More outputs produce more factual support, but also more data and better graphs. Better graphs produce easily interpretable facts, which are used to make strong concrete business decisions. The graphs accurately get you to your destination.

Again, this is a simple process I use to make concrete business decisions. In the context of more time, resources, and risk, I would apply statistical and economical regression and forecasting to make stronger factual business decisions. The importance lies in using numerical data to provide factual insights in making business decisions, demonstrating the power of numbers.


The Toilet Paper Entrepreneur

September 30, 2008

Today my friend and serial entrepreneur Mike Michalowicz came out with his new book The Toilet Paper Entrepreneur. The book provides insight for cash strapped visionaries with little or no entrepreneurial experience. Mike is an expert entrepreneur as he’s founded, operated, and sold two multi-million dollar companies. Mike also authors a great entrepreneurial blog he updates daily. Join me in congratulating Mike in his first book release.


From EmTech08: Desh Deshpande

September 25, 2008

Desh Deshpande, serial entrepreneur and Chairman of the Board at A123 Systems, just left the EmTech stage. Desh had great entrepreneurial insights, but the one that sticks out refers to the current economy. Desh believes over the past ten years the top students from best US universities were graduating and going to financial firms; with the current condition and unknown future of the US financial systems, Desh believes the top graduates will stop taking high paying Wall St. positions and will become the next generation of entrepreneurs powered by technological innovation.

Desh was also asked, “What comes first, the company or the rights to the Intellectual Property?” The ‘ol “Chicken or the egg” question. It depends. If the intellectual property (IP) is for the long-term and projected to have a long lifecycle, then licensing the IP comes first (without the IP there is no company). If the IP is in a rapidly innovative arena, then the company comes first, because the IP may be antiquated by the time it gets licensed. In an innovative arena the company must hire innovation savvy employees and not rely on intellectual property; if the company relies on the IP then it may survive for the short term, but will struggle with growth.


From EmTech08: Ning.com

September 24, 2008

I’m currently at the Emerging Technologies Conference (EmTech08) put on by the MIT Technology Review.  This morning Gina Bianchini, founder of Ning (a platform for creating online social networks) gave an engaging presentation stressing the importants of consumer usability, simplicity, and web 2.0 revenue generation.  Ning was launched a little over a year ago and already has over 500,000 social networks.  Gina is a serial entrepreneur with a MBA from Stanford.  I highly recommend visiting Ning and playing around.  More to come on her specific usability, simplicity, and revenue generation points…