This post, Startups: Moving the Ball Forward, can be read on our new blog by clicking this link.

At a recent event organized by a local networking group where Balihoo presented, one of the questions that came from the audience was: ‘How do you keep innovation moving forward on your product/service’.  Our response was fairly simple – we scan for innovations in the marketing industry and figure out how to how to integrate it into our platform and then simplify it for our target customer base - the local marketer.  Simple response but an interesting challenge to execute on.   Its not just a question of how we would do it, but deciding if and when to add a new tool to the local marketer’s tool belt.  Integrating a new innovative tool too soon could result in confusion, lower adoption and/or wasted development effort.  Doing it too late might have customers viewing the gap created by not having it as a detractor from your overall value proposition.

I think mobile marketing technology is a great example that illustrates this point very well.  It is one of the spaces we are watching, analyzing and exploring very carefully.  There are many different innovations in mobile marketing – all at various stages of technical maturity and  customer adoption/utility.  I recently received a new mobile marketing whitepaper from a digital marketing company called Knotice. The paper provides a great overview of the Mobile Marketing Space (Get the whitepaper here) and does an excellent job of breaking down the different types of mobile marketing options, and current audience makeup. It identified the following categories:

• SMS/MMS
• Mobile Web
• Mobile Apps
• Mobile Ads
• Other (mobile video, games, music, ringtones, wallpaper, downloads)
• Emerging (2-D codes, GPS, RFID, Bluetooth)

There is clearly no shortage of innovation in the mobile marketing sector!   That is an amazingly diverse set of options and only going to grow as the space matures.  Some of these will continue to gain adoption, others may wane, and new options will continue to be created.   This brings us back to our interesting challenge of integrating and simplify marketing innovations to bring the highest overall value to our customer base at the right time.  Which of these options will offer the highest value, at what time, and for how long?  This is part of what makes product management both great fun, and a challenging puzzle that has no known solution.  It comes down to making informed decisions with diverse data.  Talking to clients, customers and the market helps us craft a product roadmap that will deliver the highest value to our customers and ultimately to our company. 

Do we have everything figured out and aligned perfectly to attack the mobile space for our target customers?  No - unfortunately the crystal ball is not working today, however with a broad spectrum of diverse inputs, it puts us in a great place to navigate the waters in way that allows us to test, and change course rapidly.

One of the great opportunities that came with our recent investment from OpenView Ventures, is the support that OpenView provides to their portfolio companies.   A couple of weeks ago we were privileged to have Jeff Sutherland (his website) spend a couple of days in our office looking at our Agile processes for improvement opportunities.

Jeff is credited with inventing the Agile software development framework known as Scrum. Scrum is not a complex acronym like many terms in software but actually comes from a Rugby formation that requires team self organization due to the chaotic nature of play.  Balihoo has employed Agile techniques for almost 3 years based on the Scrum framework.  Agile and Scrum are centered on simple concepts but as any designer will tell you simplicity is not always easy.  As a team we went through dozens of iterations to refine, improve or even change based on current internal or external conditions. 

However when you are making changes sub-optimal habits can sometimes creep in, creating derivations that add potentially needless complexity.  For example, a couple of months ago I walked readers on this blog through our sprint capacity and estimation process.  Yes it worked very well, however it wasn’t exactly simple. Having Jeff in the office offered us an opportunity to ground ourselves and do some resetting to reducing some of our current process pain points, increase throughput, decreasing team stress and simply to re-energize the team.

Some our our identified impediments:

• We had increasing levels of churn and change during out sprints due to quality issues and high priority small business needs, which created disruption to the current sprint in terms of planned work and team focus
• Estimation in ideal days was becoming further and further from actual duration, and did not offer us an effective way of measuring increases in team velocity even though it was obvious that the team was getting more efficient
• Slippage in the definition of ‘done’ allowing story points to burn down based on completion of development and not based on well defined and testable AT’s (acceptance tests)
• Increasing number of stakeholders with product requests, often pre-scheduled into upcoming sprints making it difficult to have one single source of truth on business priorities

Here are some of the changes we have made in the past 2 weeks:

• Implemented software (Jira + Greenhopper) to help manage our product pipeline, execution and release process and create one single source of the truth (note:  this process of reviewing software options actually started about a month earlier, and just happened to coincide nicely with the other changes)
• Reduced our sprint cycle from 4 weeks to 2 weeks to address the uncertainty in our business
• Switched to story points over ideal days with ‘reference stories’ to better measure team velocity.  We are using story points for both rough estimates as well as planning estimates and not converting to hours/days once a sprint is underway.  Points are burned down only once the story is tested.
• Formally creating point buckets within a sprint:  60% to new work, 20% for refinement, and 20% for unanticipated changes.  The unanticipated changes bucket is like a token system for the company giving some level of flexibility while maintaining order.  If the tokens are not used the team will pull from the backlog to finish up the sprint.
• Creation of a team impediments list to focus on bigger items that could be acted upon to improve our process and increase team velocity
• Refocus on scrum fundamentals in the planning, estimation and sprint review

As of today we are a couple days from finishing our first two week sprint since doing a reset after Jeff’s visit and things are looking great out of the gates.  The team is excited, and the organization is experiencing greater transparency into current priorities than in our company history.   (Once we have a few sprints under our belt I will present some statistics on the results)

If you have ever worked in a large company with their complicated software development methodologies its easy to see how bloat can creep into the process over time.  Refocusing on simplicity is sometimes difficult but worth the effort in the end.

Also of interest:  A few months back I discussed our use of Agile concepts across the company.  We are now moving on to phase two of this process so stay tuned.

This past week I was honored to be part of an entrepreneurial round table discussion with Idaho Congressman Walt Minnick hosted at VengaWorks.  The purpose of this event was to open up dialog between people in the entrepreneurial community and the state government to understand how the government can best support the small business sector.  Although the discussion was fairly short, an interesting trend emerged that Minnick smartly picked up on, and noted as one of his key take-away’s:

Entrepreneurs unlike many other business groups aren’t looking for handouts from the government.  They really just want the government to step out of the way and let them start, run and grow their business on its own merit.  For example - reduce/remove bailout vehicles that allows failing business models to continue, creation of efficient pathways to available startup/growth funds, and sensitivity to how different types of taxes can impact small business. 

It is said that entrepreneurial ventures and small business will continue to grow in this country and could be the driving force behind economic recovery in this country.  All governments need to focus on is getting out of their way.  Its that easy.

Agile software development in a startup is fast, challenging, exciting and dynamic however one of the hardest things to accomplish in this environment are  predictability and repeatability.  When teams start agile development the first sprint(s) can often be disastrous, and lead to abandonment.  The easiest way to build predictability into the process is to think about a Agile development as a simple supply (engineering resources) and demand (product needs) relationship.  The key is to increase the accuracy on both sides of the equation.  

When you read literature on Agile development there are a couple of standard techniques suggested to improve predictability:

• Triangulation:  The process of tracking estimates and then when a ‘like’ feature comes up you use previous estimates to triangulate in on a reasonable estimate. 
• Cycle Velocity: Teams track velocity or points throughput over a given (short) development cycle, and uses this as a starting point for the next cycle.

Great!  except that in practice these are marginally effective at first.  One of the things we have found to be a great step forward on the demand-side estimates was to create better definition around the base estimation factor.  Estimation, and product throughput in agile development is typically measured in ‘points’. There are different schools of though on how a point is defined. Through time and experience we have found the following definition works best for us:  A point is one day’s worth of development time with little to no interruptions by a senior software developer.

With a more defined based estimation factor we then added complexity multipliers to our user stories (feature requests) to help with triangulation.  Often we would get bogged down in a lot of what if discussion which is good, but often created angst among the developers when trying to create estimates. We moved to a model where estimates were stated as best-case, and then we would add multipliers for both technical complexity and business complexity to generate a risk adjusted estimate in addition to the best case.

Now what about the supply-side?  Often overlooked, but just as important…If not analyzed correctly it can create an overworked engineering team.  Of course in a startup, everyone is overworked, but the key is sustainability. Especially with small teams and short development cycles small supply-side ‘events’ can wreak havoc on predictable product throughput. We have found that the following items need to be effectively factored into the supply-side calculation:

• Team member skill levels
• Vacation time
• Overhead/support needs

Every team member starts out with a baseline FTE (full time equivalent) value of 1.  First we start by adjusting the baseline value down to adjust for skill differences in junior resources. Any vacation days that the engineer will be taking during the sprint cycle are then factored in, as well as the expected % overhead (P1 bugs, production support)  that each resource will be expected to cover during the cycle. Calculated out for each resource and then added the numbers together gives you a net FTE count for the team, which can then be multiplied against the days in the sprint to give you a baseline supply estimate.

During sprint planning we then begin estimating against the demand until you hit a number where the supply-side estimate is approximately sitting between the demand-side best case estimate and the risk adjusted estimate (assuming some stories will work out closer to best case and some will work out closer to worst case). 

These minor enhancements along with team experience have allowed us to create an extremely predicable product development process, that is not only repeatable but also sustainable.  All critical in startup product management and software development.

If this concept interests you - let me known and I can send you the spreadsheet template.

On the heels of our recent successful on-time launch of the next version of our Local Marketing Automation platform, I though I would go back and revisit what we have accomplished over the past few months and some of what lead up to this initiative.

From a macro perspective, it might actually be considered almost textbook SaaS (Software as a Service)development: Build and prototype quickly, get customers early, get feedback, drive to early revenue, continue iterating the product features and re-architect the technology in a just-in-time fashion.  Then, of course add in your typical startup constraints - budget limitations, resource constraints, just to spice things up!

Let me first take you back to the dog days of summer in August 08 when we launch what might now be called the beta release of our Local Marketing Automation platform (although we resisted the convention of actually calling it a beta) with our first set of customers.  The application showed immediate value, and our user base grew quickly.  However, by December of 2008, it became obvious that from an operational and scale perspective we had a few issues that might get worse given our current trajectory.  Additionally, aggregated customer support call data indicated a number of recurring themes, in addition to feedback from the field with potential clients showing some leading indicators of potential cracks that might become problematic when our growth track continued.  All of these diverse data points were indicating a need for a larger revolutionary overhaul over the current evolutionary development model.

January 2009: In addition to our standard ongoing iterative development process, we began brainstorming ideas for how the application could be redesigned to make a revolutionary leap forward.  We did this with a user-centric approach, starting at the user interface and worked backwards into more of the technical aspects of the design.  Even though our product falls under the B2B application space, our focus was to designing it for a B2C user from a design and usability perspective.  We wanted to make the application intuitive and usable, without the need for extensive training.  We first looked at other sites that were popular on the web that had related functions and worked well in the consumer world.  We then took these design concepts, mixed them with our domain expertise and applied them to our product.  This first produced a few hand drawn mocks, followed with some more functional screen flows put together in PowerPoint.

Next, we shopped these around to our all teams internally - sales, marketing with a deep focused on the groups that interacted with the app and our customers directly (inside sales, account mgmt, support).  They were our best window to our customers without the time or luxury for extensive market research.  Along with this, we presented the conceptual flows to our current client base.  From here, we moved forward by presenting the concepts to a select set of actual end-user customers identified by our account management team.  Looking back at my files there were at least a dozen major revisions through these prototyping exercises with many many more minor tweaks.

Now that we had a good idea of where we were going, the next step was to engage our creative team, who then gave the life to our wire-frames as they would appear in the real application.  This also served as an exercise in breaking down our interface into named visual components to support a common language when talking with our technical team.  This turned out to be a critical factor in ensuring we could develop the solution at breakneck speed.

So, to give some perspective - we did all of the above over a 2.5 month timeframe through Mid-March as a side project, while we still continuing to do iterative development to enhance the existing product (being extremely careful not to develop things that would likely be thrown away with the upcoming redesign).

In March we started working with our technical team on design to see what the new concepts would mean to the underlying architecture (data and business logic).  It indicated large changes - but for the better.  We would be able to throw out a lot of things and build new structures that would support our customers more effectively.  (In the end 80+% of our data structure and code base would be rebuilt).

In April we started the first of two formal development sprints with stabilization periods between each that would span a total of approximately 12 weeks.  In that periods of time, the product and development teams (with the support of the rest of the company) carried out a Herculean effort of rapid design and development - making constant adjustments as new issues arose.

About 4 weeks into the effort we locked down our release date to June 15.  This was critical to support ongoing sales efforts and work with clients to support their internal planning.  Due to the large number of dependencies and the scope of the change, about 6 weeks in, we had to start managing the overall effort with more of a ‘traditional software project management’ technique to incorporate all of the other pieces required for a release of this magnitude (customer transition & training efforts, outbound communication, cross company testing etc.)  However, at the core we continued to follow agile development principals, and the agile mind-set.

The cut-over was planned on a weekend, to give us the most time to react to any issues with the deployment.  We used almost all of the hours in that weekend to upgrade, convert customer data and validate to ensure a successful go-live on Monday morning.  On Monday June 15 the latest release of our Local Marketing Automation platform went live! … breath.

In retrospect, here is what I would consider to be our 5 key success factors for this redesign:

• Relentless focus on the customer, and letting form drive function
• Domain knowledge backed up with real world experience from the beta allowing us to design/build rapidly and make fast decisions
• Fanatical focus on prioritization to time-box the effort
• A passionate product and engineering team with a ‘lets getr done’ attitude
• An all hands on deck mentality across the company to support the product release where and when needed

Within days of launch, feedback has started rolling in from the our support team and through our customer transition/training webinars being held.  Here is a quote our support team received on day 2:

“I just wanted to say thank you for what you’ve done with the tool.  I had a list of things that I wanted to see changed, and this new version has covered almost all of them.  I really appreciate the changes you’ve made.  It is a lot more user friendly.”

Of course you can never sit on your laurels for very long as constant improvement is a must to stay competitive, but at the end of the day this is really what product development is all about. A satisfied, excited customer.

For 2.5 years now, we at Balihoo have applied, practiced, refined and tweaked agile development concepts to create a highly functioning and well oiled product development process.  Yes, we still have issues - the real world and a constantly changing marketplace will do that to you.  Our process is still evolving to this day and will continue to do so to support the changing face of our company, but in general it is stable and predictable which is a great feat as anyone in software will tell you.

Our chosen path for product development started with a flavor of Agile called Scrum.  You see Agile is not a methodology as some might suggest - it is a mind-set.  At its core it is about

• Individuals and interactions over processes and tools
• Customer collaboration over contract negotiation
• Responding to change over following a plan

I say we started with a flavor of Agile called Scrum.  The thing is  - every company and situation are different.  People who fail with Agile are looking for a cookbook.  Agile, Scrum, XP or any of the other buzzwords thrown around are not cookbooks, and if you try and treat them as such you will end up abandoning the concept as ‘great idea but won’t work here’.  It takes effort, experimentation, and hard work to figure out what works best in any organization, but the payoffs can be great.

One of the key concepts used in Scrum that we have kept, is the concept of a morning stand up or more affectionately known as the morning scrum.   At its core the morning scrum is really a communication tool with an underlying theme of self organization.  It is focused on:

• shared commitment
• communicating daily status, progress and plans
• identifying obstacles so the team can take steps to remove them
• setting direction and focus
• building a team

On the surface, it might sound like any other meeting, but it is much more than that.  (You can learn more about how a morning standup/scrum is organized in software development here)  For example, it takes place  every morning, everyone stands, its only 15 minutes, and its organized around 3 basic questions. They are:

• What did I accomplish yesterday?
• What do I plan to accomplish today?
• What roadblocks or issues are standing in my way ?

There is actually a 4th one that could be used at the manager scrum: What other teams will I impact by what I am doing?

As an organization we decided that it might be worth adopting this concept across all teams in the organization separately.  Of course it would need to lose some of the software development nuances, but again - thinking about underlying concepts and purpose we thought it would be an excellent tool for other/all groups to increase the rate of communication without sacrificing time,  drive issue ownership and resolution more quickly, and generally get the day going with a bang.

Now, a few weeks into this experiment we have all teams carrying out a planning exercises (mostly on a calendar month basis), track ’stories’ (goals) on a visual board and communicate status to their teammates with with a standup each morning.  I know that some will say: ‘That wouldn’t work for us because of the work we do’….  We have account management, sales and even our creative development team trying and adapting the concept.

In addition the management team is also doing it as well, which comes with additional challenges due to the typical cross functional nature of the work, the sheer diversity of items worked on, and ensuring that we  do not duplicate items that are already being managed by sub teams.

(Image: Balihoo Mgmt Team Scrum Tracking board)

Everyone is still trying to figure out how to make the concept best work for their teams, but early feedback is already positive.  For example, At the management level, we have dropped our bi-weekly mgmt meetings now, and they only come on the calendar for special topics.  We have had a number of people in the organization say that the morning scrums get everyone energized and focused for the day, and almost universally everyone agrees that the near real time, quick view of what’s going on around, helps keep important information flowing and helps drive issues to resolution much faster.

Only time will tell how things evolve and change, but for now we will continue to iterate and adapt the process to fit our demanding organizational needs.   Many startups call themselves agile as a synonym to chaos, however with simple tools like the morning scrum, it can start to feel a little more organized and maintaining or even increasing the organizations agility.

Great! you say - Where can I sign up to rent a Twitter list to send out my offer?  Unfortunately its not that easy.

Yesterday, Abrams Research released their 2009 Social Media Survey results carried out during February 2009.  Social media should be on every business radar, even if you are just starting to think about it, this is a good quick read and will get you thinking.

Amazingly 40% of the responders in the survey picked Twitter as the number one social media service for businesses.  However not in the traditional ways that a marketer might think…which is partially why this tool and others under the heading of New Marketing cause confusion and frustration among marketers more familiar with traditional one-way techniques.  A comment I heard from someone a couple weeks ago pretty much sums up the confusion felt by many…  “I need to get myself a Space Book account:)”

So why did survey respondents pick Twitter as tops for business?  Here are a few of the comments made:

• Twitter is the easiest way to communicate, connect, and drive a call to action
• Twitter is very hot right now for brands
• Twitter offers instantaneous feedback from and interaction with customers/users
• Twitter give the ability to broadcast and give a voice to the business
• Twitter is the quickest way to spread information virally to a wide scope of people attached in lots of random ways
• Twitter is the best way to bridge the personal-professional gap - once people care about you the person they care about you the brand

You will notice in these comments a common theme that is very different than traditional forms of marketing.  Its about building a relationship with your customers, not marketing to them.  Its a strategy that helps build loyalty, awareness and thought leadership.  The key to this is that you need to have something interesting to say.  This pretty much sums up the basis of all new new marketing techniques.

This probably isn’t news to some.  Blogs also support many of the same objectives, and in fact Twitter is often referred to as a micro-blogging tool.  I read recently read (via a tweet) about how Twitter is shifting away from being about ‘what you are doing’, and more about ‘what has my attention’ now, which shows the maturing and evolution of the platform.

Blogs + twitter now become a powerful marketing combination.  To me, if used effectively Twitter can be a ‘feeder system’ to other forms of marketing.  Its an easy no risk way for a customer to ‘try you out’.  This feeder system - could bring them into your blog, promotional offers to your customers etc.  Just be careful to not turn it into another push medium for a one-way message.  Many made this mistake with blogs when they first started to permeate the business space.

A second interesting tidbit I picked up from the survey results is that while traditional online advertising (eg Banner ads) ranked dead last in opinions of the best way to monetize social media, targeted ads ranked second.  The key to this is smart contextual ads.  I recently read about a new tool called Twitterhawk that supports an interesting targeted marketing offer especially for local marketers.  It will scan localized twitter traffic and based on keyword matches you can 1. have the system send an auto response, 2. have the system find matches and you confirm before sending, 3. queue up possible matches allow you to respond directly.  With targeted marketing, there is always a fine line between true targeted marketing and spam, however consumer feedback will likely keep these services honest.

Last point I want to raise about the survey: There was a question related to companies that are doing a good job with social media, so for those looking to better understand best practices and how it might be applied to their situation the experts pointed to: Zappos, Dell, CNN and Wine Library.  There are many others as well but remember every organization is different.  One of the key things to remember with new marketing: don’t think of it as a new set of tools to apply old techniques.  Your business really needs to think about how these new options might allow the business model to be changed and transformed to take advantage.  Much harder to do but the only way to be successful.

Yesterday - probably like many of you, I watched the Inauguration on Live stream via CNN in partnership with Facebook.  Watching that really hit home how social networking sites are starting to evolve truly away from self centered ‘look at me, look at how important I am’ usage model to one of real discussion.  I found it amazing to see the stream of thought coming in from online users.  According to information collected there were over 1 million ‘wall updates’ during the inauguration.    What is more amazing though is the increased use of online streaming to watch live Television.

According to the associated press, as of 3:30 p.m. EST Tuesday Jan 20, CNN.com said it served more than 21.3 million live streams globally since 6 a.m. That was nearly four times the amount of live streams on the site on Election Day when there were 5.3 million lives streams.  Then consider that many of these were likely in group settings at schools and offices to get an idea of the total number of viewers online.  Yes there were some bandwidth issues for some but think about how far online video has come from shoddy sometimes pirated clips on You Tube only a few yeas ago to live streaming and online TV.

Today I received a link to a free (sponsored) copy of a Forrester report about online video trends.  It was written in May of 2008 with numbers based on a Q42007 survey, but amazingly relevant considering what we are seeing unfold (If anything the numbers are higher now).   Definitely go and get a copy - it worth a read.  The premise is that people are now using their PC like a TV, or as a device to port online based video onto larger TV screens, and the trend to online TV will continue as long as there is convenience, ease of use and an ‘appropriate’ level of advertising.

They present some interesting statistics on usage habits.  In addition, they present some thoughts on how the market could unfold.  For example - how online TV and the net will likely upstage the DVR as the net will allow for place shifting as well as time shifting which is offered by the DVR.

In an era when broadcast advertising is losing its effectiveness, online TV presents a new opportunity to bring ad revenue back to this medium.  Plus local advertisers should be very excited about this as well.  Just like other online advertising options, online video gives a user the ability to track and target much better.  In addition as customization and distribution technologies such as Balihoo Marketer bring the power to the local advertiser at an increasingly affordable price point, TV advertising becomes a very viable option for any small business - not just group buying or the largest retailers.

I subscribe to a great free service called Change This.  Each month I get an email with a list of new short e-books and or manifesto’s on a variety of thought provoking topics.  In the most recent issue there is a short e-book by Martin Linstrom called This is your Buyology.  It is a summary based on his current book Buyology – Truth and lies about Why we buy. 

The e-book focuses mainly on his research in using neurology to determine the similarities between religious followers of faith and brand devotion to better understand consumer desire.

“My objective was to use neuroscience to examine whether the same brain activation evident in the brain of a devout Christian, when exposed to faith-related triggers, was also evident in the brains of fans of emotionally powerful brands like Apple, Harley Davidson, and Guinness when they were exposed to the iconography of their brand preferences.”

Obviously based on release of the book he found some correlationJ  He then interviewed religious leaders from around the world to determine the components for a powerfully engaging religion.  The ingredients he found were the following:

·         Clear Vision

·         A sense of belonging

·         Power from enemies

·         Storytelling

·         Grandeur

·         Evangelism

·         Symbols

·         Mystery

·         Rituals

Some of these are more obvious than others.  For example I found Power from Enemies a very interesting concept.  A brand’s enemy or competitor is a valuable tool, yet most brands do not advertise their enemies.  Maybe harder to put into practice than the idea itself but one example I can think of is Apple and their sticky campaign of Mac vs PC,  however as the article points out, few brands understand that an enemy is just as essential for a brands success as its logo and all other identity signals. 

Another I found intriguing to think about was Rituals.  The example they used was the use of lime with Corona.   The interesting thing about this ritual was that it wasn’t started by the manufacturer – it was invented by a couple of bartenders in California.  What other brands have rituals associated with them?

The article finished with a discussion and a proposal that brand logos are starting to go by the wayside as the core differentiator for a brand based on the neurological data.  The author’s opinion is that the battle is really at the subconscious level where decision making really happens, and the most powerful brands no longer need a logo for brand recognition.  What he refers to as smashable components – color, shape, sound smell etc.  The indirect signals that tell the story about the brand without having to show the logo.

It might be an Interesting exercise to think about and how these concepts can apply to your business.  These points are easier to think about when you talk about the iphone as the article does, but how for example can this same concept be applied to non products (such as software) or services?  What are the indirect signals for your brand?  Are they consistent or mixed?  Strong or weak?