E077: with Tony Haile

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Jason Calacanis hosts This Week in Startups with guest Tony Haile of Chartbeat.  Also in the studio is Storkbrokers founder Sterling Hawkins and Jose Caballer, Chief Visionary at The Groop Digital Agency.

0:00:00   Intro – Today on this week in startups will chat with Tony Haile the general manager of the analytics site Chartbeat. I liked it so much I invested. Another fascinating glimpse behind the startup with Sterling from StorkBrokers.

0:01:50   Next Global TWiST Meetup scheduled for September 21, 2010 at 8PM PST (11PM EST), to accommodate Australian and Asian participants.

0:02:30   Thanks to TWiST superfan Scott Simko for his work blogging for This Week in Startups he is resigning to spend more time on personal pursuits.

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0:04:40  Ask Jason – Matt Cooper (MC) of Addroid (West Hollywood, CA)
Matt’s new business Addroid has received a cease and desist letter from George Lucas because of the use of the word ‘Droid’ in the name. Matt is looking for some advice on how to proceed.

Answer – Companies communicate through letters and have to continually protect the viability of the trademark, such as the word “droid”. Fair use and appropriate compensation for the benefit derived from the use of the word droid is discussed as well. Ultimately the test is confusion on the part of users, and infringing on their ability to do trade in the market. Rather than fight this in court, look for a way to compensate Lucas.

(Matt responds by explaining the source of the name) Addroid, comes from the word Android, which is not a trademarked property of George Lucas.

Based on this new information, Jason reverses his position on the strength of the case, and suggests taking the fight public (bring it to Electronic Frontier Foundation (EFF) type sites like BoingBoing). Also suggests making a phone call instead of engaging in a legal battle.

0:18:00  INSIGHT FROM TYLER – What if the Mob called AdMob

0:18:30  The Interview with Tony Haile (TH) the General Manager of the analytics site Chartbeat

0:18:40  Chartbeat is Google Analytics on crack. Jason is the first angel investor and advisor in Chartbeat.

0:19:55   How long has Chartbeat been around and when did you join the project? We launched on April 2nd, 2009 and I joined the very same day.

0:20:26   Tell everybody what Betaworks is and how it works. (TH) Basically it’s a media holding company that focuses on the real time web and social media. Sometimes it builds a company, sometimes it acquires and sometimes it invests.

0:21:55  How did getting involved with Chartbeat work? I came in for another project, that wasn’t quite right for me, subsequent meetings resulted in running Chartbeat. Baptism by fire.

0:22:19  Whose idea was Chartbeat? It was originally a startup called firefly. But the businesss model didn’t scale to $100M. So we pivoted and rebranded and pushed it out April, 2009. Realtime analytics is a different model.

0:23:45   (Jason pulls up the ThisWeekIn site on Chartbeat and Jason and Tony discuss what the different metrics mean, and how you can look at the realtime statistics and a 30 day view.) Interesting discussion about how Chartbeat differs from traditional analytics. Active Visitors (the heartbeat), Engagement, Site Performance, Time Tracking, Top Pages, Traffic Sources, Refers, Map Distribution

0:32:10   Take me through the launch of the product. How did it go? How did you get adoption? What was your marketing strategy? An advantage of Chartbeat is that it’s visually attractive, and that’s helped tremendously. We did analysis of different sites and figured out how to market the product. What we found is that the more traffic you had the better you liked Chartbeat. Our technology was built to handle massive amounts of data and that was appealing to large sites. The term “Referential Markets” it’s a group of people who talk to each other. Referential Markets has helped us in our marketing. Twitter was a big help as well.

0:36:23  Can you talk a little bit about the API? The API is live. (TH goes on to explain how Gawker is using the API to chose the lead stories based on the analytics in Chartbeat.) Gawker is also showing total visitors on the site, which comes from Chartbeat.

0:37:15  How do you make money? We have a bizarre business model, we actually charge for stuff. Simple, 9.95 for 1000 concurrent users and increases on volume.

0:38:13   Explain to me how you came up with this groundbreaking model of charging for a product? It’s something we read about in old media…

0:39:35   Take me through the funding process of this company, how you decided to raise your A round? What was your goal and philosophy? We wanted to hold off until it was the right time. We had traction and a good sense of direction, then we felt that it was a good time to start exploring a round. We were very lucky. We didn’t have to do too much of a roadshow, a few people came to see us. In the end we had the people that we really wanted from the start. Being involved with Betaworks gave us access to a number of investors coming in to see other companies. We simply sat down with them to get their advice.

0:42:28  “If you ask for money you get advice, if you ask for advice you get money”. It wasn’t about the money it was about the people and we feel we have the best in the industry.

0:44:35  What’s next? We think of ourselves as doing something very different from Omniture or Google Analytics. We only keep data for 30 days. We focus on tactical response rather than strategic insight. We’re for exploiting unusual behavior. For dealing with transient content. We’re focused on customers who have difficulty with analytics. 3 key things: 1) Make something people will actually look at. 2) Make that thing actionable so they can gain some benefit 3) Make them want to take those actions.

(JC) I think your overwhelming focus on realtime will keep you protected from competitors. Wish you continued success and thanks for letting me invest. Everybody take a minute to follow Tony on twitter @arctictony. (TC) I think it’s one of the coolest things out there. One of those things that you can’t imagine not using once you’ve become accustomed to using it.

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0:49:10  DNAMail is the only sponsor that has lasted all 77 episodes and I’m just blown away by their support.

0:49:35  Behind the Startups with Sterling Hawkins of Storkbrokers and Jose from The Group

0:50:40  The original Shark Tank episode with Sterling Hawkings of Storkbrokers and some feedback from Jason

0:53:30  Introduction of Sterling Hawking and Jose Caballer. The purpose of this segment is to peer into the inner workings of building a startup. Viewers are a ‘fly on the wall’ while Jason, Sterling and Jose discuss various topics around improving the Storkbrokers website and offering.

0:54:45   The Groop have worked with approximately 30 startups and with company silk StorkBrokers they get to play a tangible role and how they work with entrepreneurs. It’s ultimately about what Sterling wants for his company and the customers needs. It’s not a tech thing it’s a story about the relationship between customer and how the site solves their needs.

0:57:10  Jason asks, what was your original process for building the site? When we had our first child we noticed we were starting accumulating things and it was always a hassle to go get things. Originally the idea was to become the Amazon of baby items. They pivoted to become more like eBay creating a marketplace for baby items. Further market analysis helped them refine their business model.

1:00:00  Sterling mentions some mistakes made along the way: Scope creep, content, product are all issues we addressed.

1:03:25  What’s wrong with this website. Jose describes the metaphor of the brick (market penetration), scope creep and shiny object syndrome. Jose describes the process of prioritization and aligning the website with the goals of the company.

1:05:05  Jason asks what are the goals and metrics for Storkbrokers? Sterling responds with his assessment of the goals and business model of the site. Number of items listed, days until sell, cash value of details, earnings, conversion, svaings / value prospect, green (environmental impact). Green value might be the biggest driver in Jason’s mind.

1:07:00   Jose talks about GreenMyParents, which is to help the kids teach their parents about how to be environmentally aware. The green aspect should not be underestimated. There is a huge emphasis toward green behavior. Jose discusses that the site has to match the culture of the site. In some cases the site needs to be less flashy and more closely match the customers that will be using the site. Savings.com is analyzed as an example of matching site to customers.

1:10:30   Jose explains that creating a unique site requires an understanding of goals, business persons and especially customers. You’re looking for a hook. Green is a great hook. Saving money. Saving Time are all good hooks. These become bullet points for the business.

1:11:30  Sterling describes some of the pain points that drive the value of the Storkbrokers site. Cleansing, organizational, time savings are all important drivers. Jose suggests that the process of removing and giving are big drivers in the family space. Jason suggests there is a altruistic angle to the site, by helping people that might be going through tough times.

1:13:40  Jason asks about video as a way to communicate with customers. Sterling believes that video humanizes and connects the customers to the goals of the site. Jason loves the simplicity of CommonCraft videos and always hits play.

1:15:20  Jose discusses video in terms of his experience at The Groop. It evokes emotions and connects people to people. Testimonials are really powerful in the context of a website like this. Jason gives some examples of testimonial videos that could be powerful.

1:17:25   Jason asks Jose what an average cost would be to do this kind of work for hiring The Groop, or an individual or a ‘Big Ass’ design company? Jose responds with some example differences. Large agencies are coming in at 4 to 5 times or more than The Groop price of $~50K for a project like this. Individuals are $3000-4000 per month, but the for basic work, but you don’t get the strategy and introductions. Like anything else, the relationship and collaboration is key to success. Scale and overhead require the larger firms to price higher that boutique sites need to.

1:23:15  Jason explains that there is a risk component to the choice. The individual contributor is a single point of failure, and therefore the most risky. The large firm provides the greatest protection from an individual upsetting the timeline and momentum. The Groop is in the middle. Large enough to reduce the risk without the huge overhead and cost of the larger firms. Jose describes a specific example of how this works. Risk tolerance at the executive level is a big driver.

1:24:40   Jose describes an event The Groop School iPad Battle, on November 3-5, 2010, which will focus on educating media and entertainment executives. The event will have a competition and a studio.

1:25:30   @KrisNessa reenergizes the green discussion with a tweet about “green recycling”. Jason, Sterling and Jose discuss how green thinking is pervasive in the upcoming generations.

1:26:46  Jose answers a question from the chat room. “If you had $1000 for a project, what would be the right allocation for that budget?” Resourcing is key. Getting the designer to buy in is key, because their excitement will increase your budget. Your $1000 will turn into $3000. It helps their portfolio.

1:29:00  Thanks to DNAMail and Trada for supporting the show. This week in wants more hosts. If interested, email Lon@thisweekin.com. Jayters need to email Lon@thisweekin.com.

1:30:45  End

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