4 Tips for Business Success | Getting Your Mobile App to Top the Charts

What does it take to build a successful technology startup? Is it about a great idea? An amazing group of people? Being in the right place at the right time? There are as many answers as there are entrepreneurs, yet it's a question on the mind of anyone who has ever decided to take the plunge and work on a startup.

Last week at a Startup Grind meetup hosted by Derek Andersen of Vaporware Labs, Jeff Smith, co-founder and CEO of Smule shared his formula for business success. Smule, if you have not heard of it, is the creator of some of the most popular, chart-topping social music-making applications for the "i" platforms (iPhone, iPad, etc).

Product

As history teaches us, best technology does not always win in the marketplace. Jeff argues, however, that the best product does win!

But what about the best marketing? What about a really well-funded company that beats out its competition by flooding the market with advertising? (Anyone else thinking of LivingSocial versus Groupon?)

Here's Jeff's point: the best product is one that prioritizes the user's experience. Having identified the core group targeted by the product, the development for such a product is focused on (1) how likely they are to use the product, and (2) how likely they are to recommend it. Word-of-mouth, after all, is a tremendously powerful distribution channel. But this word-of-mouth, viral marketing will only work well for the product that really grips the customers.

And it is a much more mature market now in mobile apps than it was just a few years ago. If customers were blown away by Smule's first app, the Sonic Lighter (a virtual cigarette lighter), today's customers won't be as easily impressed.

In working on a new product, Jeff's team tests the premise by asking itself, "What's the 20-second YouTube teaser for this product?" or "What's the 20-second demo?" If the teaser or the demo doesn't grab the user in those 20 seconds, viral distribution will not work.

Is a teaser or a demo really a good proxy for the product, you might ask. Isn't this exactly the case where great marketing wins? Though Jeff did not elaborate on this point in his presentation, I think he would say that the teaser or the demo is the product essence, not a clever marketing reel. And the main reason for that is that with viral distribution, the majority of the time the 20-second demo is not going to come from the company, but from a fan showing the application to a friend off his phone.

"The best products," says Jeff "are developed by developers who are close to what the user is doing."

Cumulative Value

Jeff's next point was very straight forward--don't let your developers convince you to start from scratch each time, for each new iteration. Build on the existing code, even if it seems like it would be easier to start from a clean slate, even if the existing code looks convoluted and messy. Whatever its other failings, existing code works! Build on that. Don't let that value slip away.

Customers

"Empower your customers with all their creativity," says Jeff. Take a look at this YouTube video posted by one of the fans, using Smule's app Ocarina. Amazing, isn't it? This video, being a fan video, cost Smule nothing to produce and nothing to distribute. But it has been viewed almost 500,000 times. According to Jeff, Smule has been able to map a direct correlation between traffic for YouTube videos featuring an application and application sales.

Listening to the customers, hearing and acknowledging what the customers want, is key. The biggest mistake, says Jeff, is to think you know better than the customer. Everyone in the company has to be thinking about the customers. Making the customer the focus, lowers customer acquisition cost, and allows those funds to go to product development and enhancement.

Team

Simply put, the company's ability to recruit and retain top people is going to be directly related to the company's success. I doubt there is anyone out there who would dispute this correlation.

Jeff focuses on building Smule's culture around creativity, not discipline. This has its own drawbacks, to be sure, but it works to help create chart-topping products. In hiring, says Jeff, they aren't looking as much at the skill set. First and foremost they care about the attitude.

Thank you, Jeff, for a great, insightful presentation. Your PowerPoint was inspiring! [For those who weren't there, there were just the four words spread out over the four slides: product, cumulative value, customers, and team.] ;)

Inna Efimchik

Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.

Seasoned Entrepreneur Holds Nothing Back: Business Advice & Technology Landscape Overview from a Pro

I always find it stimulating to hear entrepreneurship advice from the pros, those serial founders, who seem to have perfected the science (or art) of startup building from the ground up.

Tonight, it was my pleasure to attend a presentation by Ben Galbraith, a very skillful public orator, serial entrepreneur, and the speaker at tonight's Startup Grind Meetup, organized by Vaporware Labs founder Derek Andersen. I doubt it is possible to give the presentation justice in written form--to capture that personal charm and charisma of the speaker--but I will do my best to recap the highlights.

Ben Galbraith on Entrepreneurship

The more successful entrepreneurs that you talk to, the more contradictory advice you are bound to receive. What worked for one, did not work for another, and vice versa. There is no panacea to running a successful startup. Acknowledging this paradigm, Ben Galbraith nonetheless shared with us a few bits of wisdom from his well (wealth) of experience.

1. Business partners. The road to building a business can be a long one, so it is fantastic to have someone to share it with, both the laughs and the sorrows, as they come. And the amplification of skill sets is also amazing when you have a partner. But, it is imperative to have trust with your partner. And it is absolutely critical to understand from the outset what everyone brings to the table. For the business to work, the commitment and skill level of the partners has to be commensurate with one another.

2. CEO Role. Whatever the skill set of the CEO, he must come out from the trenches early, and resist the temptation to stay in and be part of the... fill in the blank... technical, business, sales, etc. ... team. The choice is, to become a coach or to become a bottleneck. Why so? If the CEO is not leading the business (because he is busy in the trenches), no one is!

Photo courtesy of Alexandre Ferreira
3. Take the Leap. As someone who's done it and lived to tell the story, Ben Galbraith says that working for yourself is amazing! If you are working for someone else, you are not the owner of your fate, nor do you know all the cards. You may get "misled" (to put it softly) about the state of affairs at the corporate level and left out to dry.

To step out of my recap mode for a moment, I must say that unfortunately I know about this first-hand. The last several months at Heller Ehrman, before the ship sank, were not pretty. "Heller Ehrman is strong because it does not have any debt," we were told throughout. "Nothing can take us down." It was effectively the end of Heller Ehrman, a San Francisco law firm that was founded in the late 1800s, when its bank pulled the purse strings shut. Oops, turns out there was debt after all.

So when Ben Galbraith told us "Take the leap of faith" and venture out on your own, I said (in my head), "Hear, hear!" It's a choice that I made and that you may have already made or are on the verge of making, if you are reading my blog.

Photo courtesy of AMagill
4. Money, money, money. "Don't make money your goal," was Ben Galbraith's last point. (Easier said than done, if you've looked at real estate prices in the Bay Area.) But it is true--you have to find an idea that resonates with you and that you believe in and run with it. You can't predict where lightning will strike, and you can't choose to found or join a startup to get rich.

Ben Galbraith on the Technology Landscape

In this second part of his presentation, Ben Galbraith set out to answer the question of why Microsoft, traditionally known for its protectionist policies, has now embraced HTML5. There is a profound transformation afoot that is forcing Microsoft to evaluate their position. So what is it?

Let's review some history first. Who remembers the time when the Yahoo homepage used to look like the image on the right? I know I do. This screenshot is only twelve years old. Many websites from those days might look a tad outdated to today's consumer and Ajax is to blame.

Ajax revolutionized the way we think about the web--it was about making the web user experience attractive and more interactive, blurring the line between desktop and web applications, and causing a resurgence of technology companies focusing on web applications.

In the world of desktop applications, Microsoft was king. It may not have had the best operating system, but it had a suite of applications. When focus shifted to platform-neutral web applications, other players were able to move up in the game. It was this shift towards running applications on the web that allowed Mac to reemerge as a major player (and even break away from the pack).

Fast forward to today, where the new frontier is mobile. With its $3 billion eco-system, there's money to be made in mobile and it is drawing away some of the best talent from web development. "It's a zero sum game," said Ben Galbraith, "not parallel universes." In fact, there is so much money going towards mobile app development, some companies' mobile applications today are already far superior in user experience to their web equivalents. While certainly some applications are not well-suited to the mobile space with its inherent screen size limitations (think Adobe Photoshop), there are others that have reinvented themselves in this medium.

Apple, historically known for being an expensive brand, is changing strategy to keep their market share. With their new, aggressive pricing on mobile devices, they are not leaving a price umbrella for competitors to use as an opportunity.

Microsoft is changing with the changing technology landscape. The world of desktop applications is giving way to web and mobile applications, where proprietary technologies just don't cut it. And so, out comes the beta launch of Internet Explorer 9, with Microsoft showing off some great looking applications running on HTML5 at the launch party. Of course, if HTML5 has as great an impact on the web as Ajax had in its day, which it may well have, we should look forward to a very exciting new web experience in a few years (as adoption of HTML5 becomes pervasive).

Other Interesting Takeaways

1. Startup Idea. This idea is not new. But it has not found a successful implementation. On the web today there is no application marketplace, equivalent in usability and user experience to Apple's App store. Those of you looking to solve a problem, go at it!

2. Getting Funded. So many startups today are looking to be funded, exploring ways to get investment capital. As we well know, only a small fraction of the startups will get VC funding. For mobile app companies, Ben Galbraith threw out what I think is an exciting and novel idea to consider--why not get money from the second tier mobile platforms. While Apple and Android platforms are oversaturated with apps, for better or for worse, there are other players (think Samsung) who may be willing to pay for you to produce an app for them. When the app is done, you can redesign it for other platforms, but you won't be bootstrapping the whole operation.

I'd love to hear from anyone who has tried this to see what their experience has been, and whether the theory holds water. :)

Thank you, Derek, for organizing yet another very interesting presentation, and thank you, Ben, for taking on the speaking role--you were great!

Inna Efimchik

Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.