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I haven’t been blogging much lately, but I finally have something to announce after a couple months of radio silence. : ) I’m excited to share that I have an opening for a Senior Ruby on Rails Developer to help my new company, 42 Friends, grow!

—If you know anyone who may be interested in this position, please forward this post on—

Over the past few months 42 Friends has become one of the leading companies on the Facebook platform. Growing Gifts and Hatching Eggs are our top two applications. We have over 10 million installs and serve tens of millions of visitors every month!

What is most unique about this opportunity is that you get the excitement of being an early team member (you’ll be #4)–and you get the satisfaction of working on applications already used by millions. You will not be spending months working on code that may or may not go anywhere. We have a captive audience ready to try out everything we launch next. And being #6 you have the potential to have a significant influence on the future of the company

In this role you will report directly to me. Although I’m an experienced software developer, my biggest passion is application concept and managing project details. I’m looking for a counter-part who I can work closely with on a daily basis to quickly bring new ideas to fruition. I need someone who can hack a working prototype together incredibly quickly, but is able to recognize its scaling limitations and architect it right when the time comes.

You must have a minimum of 5 years experience as a professional software developer focused on web apps. I’m looking for someone who has a passion for launching things quickly and iterating frequently. However, in this role programming experience is not enough, you must also have prior experience hiring and leading a technical team.

Compensation will be commensurate with experience: package will include base salary plus bonus, options, and health insurance.

Ideally you are located in Chicago, but I am open to candidates that reside anywhere. We are a Chicago-based company but have team members located all over the world.

To apply for this position send an e-mail to programmer@42friends.com with “Senior Software Developer” in the subject. Include a resume, elaborate on your relevant past experience, and tell us why this role interests you. Also, please include your salary requirements and a link to your Facebook profile.

You can check out our top applications here:

http://apps.facebook.com/growing/
http://apps.facebook.com/hatching/

Chicago start-up Humanized is launching something new this week, Songza (www.songza.com).

All CB readers are invited to the launch party this Thursday, Nov 8th, from 5:30 to ~9. It’s at Elephant & Castle on N. Wabash.  Free beer provided by New Belgium (the Fat Tire people).

I’ll be there, should be a good time.

I remember when I was a kid someone presented me with this idea: if you could collect 1 penny from everyone in America, you’d be a rich man.  At that time, it was probably a little more than 2 million bucks, today it would be a cool 3 million.

The obvious problem is that it would cost you more than 1 cent of effort to collect each of those pennies.

My previous two companies always focused on offering high value (read, “expensive”) products or services and selling them to a relatively small number of people.  It’s not until I’ve started to get traction with my Facebook apps that I’m truely appreciating the power of the reverse. My current Facebook application Grow-a-Gift has been used by more than 3 million installs and about 300,000 people use it on a daily. It allows you to send a virtual flower from one user to another with a private message attached.

To most people this application doesn’t offer that much value. In fact, I bet a majority of the users wouldn’t even go through a standard website registration process to accept the flower they have received, I would be asking them to spend 3 cents (of their time) to get 1 cent worth of value. But Facebook makes the customer acquisition process so incredibly efficient, it’s literally a 2 click install, you don’t even have to type your name!  Just like that, Facebook has made it efficient for me to collect millions of pennies (read, “users”).

The most common criticism I hear of these new Facebook applications is that poking, free gifts, funny pictures–these things are too un-serious to build a real business around them. But you should never forget, if you collect enough pennies you’ll be a rich man!

It’s been awhile since I’ve posted. I’ve been in state of reclusion that immediately follows starting a new company. JobCoin is still going well, but I’m cooking up something new. I’ll share more details as the team materializes.

But today, I’m here to bless you with someone else’s ideas rather than my own. An acquaintance of mine sent an e-mail about the all-to-common refrain criticizing “income inequality”, the “gap between the rich and the poor”–pick your wording, I’m sure you’ve heard it before.

His response to these remarks:

What’s the matter with the other segments of the population? Why aren’t they doing their part, as the top percentile is doing so superlatively, to create wealth?

Well put!

Update 11/4:

I don’t know all my readers, but I was surprised to receive a negative reaction to this. The focus of this blog has always been around business, starting businesses in particular, so I assume my readers share a common context with me. However, I do admit that the context this statement was building upon is not obvious, and it’s not correct for me to assume it so let me elaborate to make the full meaning clear.

Let me apply the idea of income inequality to a different scenario, I think that will make things more clear. Imagine sitting in a theater listening to listening to a superb piano player, the person next to you turns and remarks, “That person is just too good. Look at them, it’s like they aren’t even trying, that music is just flowing from their fingers. Now that this person is on the scene they have just widened the gap between amazing piano players and the rest of us novices.”

I mean someone really saying this, not as a joke, but with a touch of viciousness about the issue–that this person being good is making the rest of us look bad. One could respond, “This person isn’t ‘too good’, there is no such thing as ‘too good.’ If you want to criticize anyone, you’d have to criticize you and I for not being ‘good enough’. We should be celebrating this person’s ability, not grumbling at the supposed ‘gap’ it creates between us and them.”

Now of course, it is wrong to criticize the people of average ability than it is to criticize the people of superb ability, but the response is showing just how absurd the commentator’s view is by emphasizing the opposite of it.

Now back to the original quote. The context I mistakenly assumed about business, which I will state explicitly now, is two-fold. First, that value is something that is created by people and the act of creating it is a skill. Just like playing piano, some people are better at creating value than others. And just like playing the piano, creating value is a skill that can be learned and improved upon, but like any skill, there are limits to one’s potential to improve. Some people are so naturally gifted at creating value that even with a lifetime of practice, I’ll never be able to catch up.

And second, value creation is not a zero-sum game. All this talk about “income inequality” and “gap between the rich and the poor” assumes that the more value–wealth–that I create, the less of it that is out there for someone else. But this idea is just not true. Anyone who has started a business, who created something new to the world where simple raw materials existed before–cannot evade the fact that value is literally created, there is no limit to how much of it we can have and we all benefit the more of it that is created.

To summarize, this is the context I keep in mind when I hear people talk about “income inequality” and grumble at the superb value creating abilities of a small number of people and complain that this is somehow a bad thing. I remind myself of all the amazing conveniences of modern life that this small minority of people have helped to create for all of us–my iPhone, wireless internet, free phone calls around the world, portable movie players–and I don’t damn them for making me look bad, I remark to myself with admiration, ” Imagine what the world would be like if we were all that good!”

Update 11/5:

I’m not interested in engaging ad hominem responses so I have closed the comments.

Two upcoming tech events in Chicago:

Facebook Developer Meetup 

This weekend (8/18) a member of the Facebook Platform Team will be in Chicago to introduce the Platform and answer questions. Please join us to share ideas, troll for partners on your latest project, check out app demonstrations, seek developer support direct from Facebook Developers, or just socialize with people like you.

Members of the Facebook Platform Team will give an introduction to Platform, discuss best practices around product design & viral marketing techniques, and hold a technical Q&A. Plus other talks on monetizing FB apps, lessons learned, and more. Free snacks, lunch, and drinks/beer will be provided.

Details: www.facebookchicago.com

RSVP on Facebook

Silicon Prairie Social

A new tech event for the Chicago suburbs, more details here: www.siliconprairiesocial.com

Uloop is hiring a sales & marketing manager:

Uloop is looking for bright, energetic sales/marketing managers to join our team. Manage approximately 20 Campus representatives at 10 universities; Analyze data from each school and adjust on-campus marketing efforts; Create campus-specific marketing campaigns; Visit campuses multiple times during the semester/quarter

New companies on my radar:

• KnowledgeBid A new start-up by Rob Webb recently launched a new product/site, Analysts Edge. It provides user generated news for the financial community. It’s a well done site that was launched on a very quick turn-around. Rob has a good blog too.
• Cardways is an interesting start-up that allows you to send old-fashioned paper greeting cards to your friend directly from their website, fully personalized, and include a gift card from the retailer and cash amount of your choice. I’m not sure how long they’ve been around but I just learned about them and that they are here in Chicago.
• Network Blackbox has created a network-attached automated backup device.
• I recently developed a Facebook app, Grow-a-Gift, with a couple other people. Currently it’s one of the fastest growing apps on Facebook. Over 150,000 users have installed it in the last 10 days! If there are any other Facebook developers out there send me an email, I’d love to hear about your experience.

A month ago I met someone at an event. We had a few minute conversation and just recently I received an e-mail from them asking for a recommendation to a friend of mine who has a job opening, because “employment is based on who you know” and she thought getting this recommendation would help her.

I don’t mean to single this person out, but I’ve run into this attitude a few too many times and I think it’s worth saying a couple words on it. On the surface, “Who you know” does seem to make a big difference in getting jobs, starting businesses, etc. And there is good reason for it. The world overwhelms you with options: hiring people, choosing vendors, picking a movie to see–there are tons of choice for each of these things and getting recommendations from people that you trust is a great filtering process. If a friend of yours that you trust has already done the thinking and evaluating, you can benefit from the result of their effort. It’s just division of labor applied to intellectual activity.

But the idea of trying to “collect” contacts, of “building your network,” and other such activities is misguided. Its reversing cause and effect. People are willing to refer you because you offered them some value in the past and they were impressed with your ability. You can’t just ask for people to refer you, you have to do something to make you worth referring. Just like you can’t ask for admiration, you have to do something that makes you worthy of being admired. People who wish for an effect have to enact the requisite cause.

My favorite instance of this realization: You have to pursue greatness not success. Achieve greatness and success will follow. Take that attitude in everything you do and you’ll never have to worry about “building your network” ever again.

I waited in line for a few hours yesterday and purchased an iPhone. I avoided the Apple store on Michigan Ave and instead found a small AT&T store near me that wasn’t that bad with the wait. After playing with the phone for half a day now, I’m still saying WOW.

I’m on the fence about replacing my Treo with this as my phone. Most things I love about the Treo the iPhone does poorly: composing an e-mail, keeping my contacts, calendar, email synced and updating all of those items on the go. But the iPhone does a TON of new things incredibly well that the Treo can’t touch: browsing the web, music, photos, video, and checking voicemail. And most of all, I’m amazed how how fun it is to use. Even though this is a gadget with buttons and a screen, surprisingly, it has the fun-factor of a mechanical puzzle. In every single application: flicking, stretching, pinching, and sliding the interface is just plain fun.

There are a lot of great reviews (Pogue’s and Mossberg’s), but aside from the issue of whether to purchase an iPhone or not, there are some really interesting software design lessons to take away from what Apple has done. And even though this is a hardware “gadget,” 90% of the brilliance is in the software.

Every truly great piece of software I’ve used was great because it focused on a very specific need and it addressed that need incredibly well: the “less is more” philosophy. At first, when you see the list of features, it seems that the iPhone is the antithesis of this approach. But unlike most focused software, the iPhone’s focus is horizontal rather than vertical. Yes, it has a lot of applications, but in each application they only cared about half of the usual functions–in every application the focus is on retrieving information, not entering it. It’s an interesting design decision and it works surprising well.

This is most evidence in the biggest hardware decision: 100% screen, 0% keyboard. Screens are for retrieving information, keyboards are for entering information. I think the only reason they even included the on-screen keyboard is for the simple inputs like entering an address into Google maps, entering a URL into the web browser, etc that can’t be avoided when you’re trying to retrieve. In fact, 75% of the time I use my Treo it’s to read email, check and appointment, retrieve driving directions. However, one common task I perform on my Treo is when someone emails me a time to meet, and I copy and paste their address and phone number into a new appointment. There is no copy and paste anywhere in the iPhone, copy and paste is for entering information, not retrieving it.

Take away: You can narrow the scope of your application by focusing horizontally rather than vertically.

The second interesting take away: I knew interfaces could be poorly designed and confusing or well design and easy to use. The iPhone has elevated interface design to a new level; interfaces can be made fun. It’s hard enough to design an interface that is easy to use, and I would have thought the extra effort to take it beyond easy into the realm of fun would not be worth it. With any product you hit a point of diminishing returns when you are trying to improve a particular aspect of it, I would have thought “fun” would be in the realm of diminishing returns. But I’m amazed how much the “fun” adds.

Over the years I’ve noticed one of the biggest differences between “expert” users of computers and “novice” users is their willingness to explore a piece of software. Novices memorize a series of steps to get the computer to accomplish a desired tasks. Experts explore the software and come to intuitively understand the underlying mental model governing its design, this enables them to teach themselves new uses of the program. There is an analogy in mathematics: novices memorize the steps to apply a certain formula, experts understand the underlying meaning of the formula, they can apply this knowledge in ways beyond just the simple steps.

Take away: What does “fun” have to do with this? If an interface is “fun”, even novice users will be motivated to explore it and “accidentally” develop a deeper understanding of it, and hopefully get some of the same benefits that experts do from using it.

This won’t be news to any of the geeks who read this site, but for the rest of you, there is an interesting event in Chicago this weekend: Barcamp Chicago.  This is an unconferences, the attendees set the agenda. Lots of tech talks, coding sessions, and general techie goodness will be had by all.

If you’re still wondering what Ruby on Rails is all about, or you’re trying to find a developer or two to help out with a business idea, this is the place to be. I attended last year and enjoyed it, although the venue was a bit raw (it felt like I was camping indoors). This year Jason Rexilius has upgraded things all around. The one tip I’ll share: bring your own chair (those folding camping chairs are perfect).

Last week was the latest Chicago Beta. ~40 Chicago entrepreneurs gathered together to talk shop, get advice, and catch-up with one another.

Three new Chicago start-ups gave a 60 second pitch:

• SocialWare - A social networking portal application that can be easily customized and skinned for your group
• PeerSight - Join a peer group of other entrepreneurs that will meet regularly for structured facilitation sessions, similar to YPO or Vistage, but it happens entirely online
• TasteVine - You input your wine preferences and the food you’ll be eating and receive recommendations.

The audience’s favorite? …TasteVine
(Text message voting powered by Interactive Mediums)

And Chuck Tempelton, the founder of OpenTable.com told his story about how the company was built from idea to the market leader it is today. Fantastic story.

Lots of great conversation, a few of my takeaways:

• The Facebook Platform is hot. You can watch Mark Zuckerberg’s announcement. If you’re already doing development in this space, let me know.
• Leo Capital Holding, the local VC firm, is looking for investment opportunities in mobile companies
• An upcoming tech event is being put on by 606tech called Web Ascent

Add your comment with other interesting takeaways…

ADDED 6/23:  Video of the pitches:

I just told a friend of mine, “…you were right”, after one of his predictions for JobCoin played out. I loved his response:

There is no right or wrong, only profit.

Business is about solving problems, creating value for customers–not about pointing fingers or rubbing egos. That is a great quote to help keep your eye on the ball.

Addition:

Upon rereading this post, let me clarify one thing.  In the context of morality, there clearly is a right and wrong. I did not mean this quote to argue for moral relativism. I meant it in the collaborative process of building a business: when you’re working together to solve a problem. In this context, “…it’s not about pointing fingers or rubbing egos…it’s about creating value for customers.”

Dick Costolo had a great post recently about companies’ customer service (Customer Service - Foundation over Platitude).

The airline’s website and official customer service language are all about lines like ‘the customer comes first’, ‘you are [airline name]’s most valuable asset’, etc. The hotel’s website and official customer service language are non-existent. I couldn’t find anything on the site that explicitly mentioned customer service. Of course, the actual customer service experience was first-rate at the hotel and miserable with the airline.

Dick talked about the importance of transparency. How even bad situations can be made significantly better by informing the customer of what the problem is, rather than just leaving them in the dark.

It reminded me of an experience I had the last time I visited IKEA. The principle of transparency can be used by companies, not only to right a wrong, but also as a competitive advantage–by explaining the reasons behind seemingly unacceptable behavior.

IKEA has built an amazing business by providing high quality products at incredibly low costs. I can attest, every time I go there I buy much more than I ever plan to because the products look fantastic and the prices are so unbelievably cheap. Trash cans, pictures, champaign glasses, “I know I don’t really need a new dish scrubbing brush, but this suction cup thing is so cool, and for 50 cents, what the hell.”

But saving money can require cutting corners, and cutting corners isn’t always acceptable to customers. On my last visit I noticed a number of signs posted around the store. (I couldn’t find pictures online, so these are from memory):

In the restaurant/cafeteria:

Please bus your own dishes. This allows us to have less staff on hand, and keeps our prices low for you.

Throughout the store:

Why s it hard to find help at the store?  Not having lots of staff, and not having commission sales people, allows us to keep our prices low. Look around for one of the information booths and someone will be happy to help you there.

In the loading area when you pick up the pieces of your furniture:

Why do you assemble furniture yourself? Having someone in a factory assemble furniture would make our prices more expensive. Although it can be difficult to assemble yourself, it means you get the furniture right away, and for less cost.

Etc…  The cafeteria one struck me the most. When I read it, as I was carrying my tray to the dish bin, it gave me a sense that I was participating in the business model. What would have normally been an unpleasant activity, gives the customer a small sense of pride.

In my own business, I make sure I don’t make the mistake of assuming things have to be a certain way. IKEA gave me evidence that customers will jump through a lot of hoops, and be happy about doing so, if you can give them something they really want. Don’t be too quick to assume, “But the customer wouldn’t like that…”

Some of the latest buzz I’ve heard around Chicago:

• FeedBurner is officially acquired by Google. Wow. Congratulations to the entire FB team! Amazing product, and amazing reward for all the hard work.
• MediaRiver is the new name for Intelletext, and with it comes a new business model. My understand is that it’s basically a hosted recommendation engine. They could help a news site add a feature that says, “If you like this article, you may also like these.”
• Threadless got a great write-up in the latest Business 2.0. Looks like they’ll be opening a retail store in Chicago, and Digital Bootcamp might be involved in some cool ways.
• SitterCity has launched a whole new category of their service to help you find a “pet sitter” instead of baby sitters. Seeing as pets have officially become a member of peoples’ family, it only makes sense! (this happened 6 weeks ago, but it’s news to me

New companies/services on my radar:

• uLoop - looks like craigslist for college students
• QuadMarket - looks like uloop. One of the DePaul Venture Challenge finalists.
• LimitNone - is the first certified Google Enterprise Professional I’ve ever heard of (I didn’t even know there were Google enterprise professionals). They’re helping companies from MS Office to Google Apps. I’ll get excited as soon as they have an app to synch Outlook w/ Google Calendar.

Roger Bannister was the first man to run a mile under 4 minutes. Records hovered around the 4 minute mark for years, never being broken. Many thought 4 minutes was a physical impossibility for the human body. Some speculated a man’s heart might even explode if he tried. Roger Bannister thought otherwise. Through systematic training and repeated attempts, in 1954 he broke it: 3 minutes, 59.4 seconds. His achievement is amazing, but what’s fascinating is what happened after it. Within a month, John Landy broke his record. In the years following, so did hundreds of others. What prevented all these people from breaking 4 minutes in all the years before Bannister?

Think about it, how much easier is it to persevere when you know others have done what you’re trying to do. Law school, bar exam, medical school, all of these goals are challenging, but hundreds of thousands of people before you have done it. There is no question if it’s possible, you just have to put in the work.

But how often is the barrier to achievement an imagined obstacle? How many people would have argued that Wikipedia was impossible before seeing it done? If Jimmy Wales had presented the idea to you before launching, would you have argued that thousands of people would never contribute their time and energy to write those articles. Most people won’t even run the race if they’re not sure there is a finish line.

Once you’ve seen what’s possible, its much easier to imitate. This pattern is repeated time and time again. Peggy Fleming won the gold in Olympic figure skating with double jumps. Today, it’s expected that top figure skaters will do triples, or even quadruples.

It was inconceivable that a deaf and blind child could be taught language before Hellen Keller. I’m not sure if it’s commonplace now, but wow.

Edison tried thousands of different filaments for his light bulb before finding one that worked. Why didn’t he conclude after the first thousand that the material he was searching for may not exist?

The common thread in all these examples is that people persisted without any good evidence to think that what they were trying to do was even possible. They persisted in the face of perfectly reasonable doubt.

“Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision.” - From “The Fountainhead” by Ayn Rand

…This thought is half-finished. I’ve been sitting on this post for a week and I’m honestly not sure what to conclude from these examples. But I’m throwing it out there anyway.

The process of starting a new company almost always leads you to a different destination then you intended at the outset. I was just chatting with a friend about an idea for his business and I was reminded of a fantastic discussion around Judy’s Book from last year.

Judy’s Book is a local review site (somewhat like Yelp or Angie’s List). 6 months ago or so they had a slight change in direction and the CEO was very candid about their thought process internally that lead to the changes.

We asked ourselves the following questions: 

1. What are the hardest problems in our current business approach - the market issues that we keep struggling with over and over?
2. What’s (surprisingly) easy about our business – the things that are working better than expected?
3. Where’s the parade?  What major trends are we trying to get in front of with our business?

Read the full post and the follow-ups: what’s been hard, and what’s been easy.

SitterCity (profile) is hiring a Director of Technology

Sittercity.com, one of TIME’s 50 Coolest Websites, is looking for a Director of Technology to oversee and drive development of our site and management of our internal development team.

LimitNone is hiring a Web Programmer (contract or permanent)

We are looking for a Web programmer (must know HTML, XML, Javascript and any programming language). Should be an energetic guy/gal who is interested in getting involved in some big opportunities around Google Gadgets and Google API’s.

Emmi Solutions (profile) is hiring a Java Web Developer

To develop and maintain Emmi Solutions J2EE-compliant Internet applications utilizing JSPs, Servlets, Design Patterns, …

CleverSafe (profile) is hiring a Senior Software Architect

To provide architectural and big picture oversight for new commercial open source products …

Mediafly is hiring looking for an “exceptional” Senior C#/ASP.NET Developer and “the best UI developer in Chicago“

Last Thursday I attended the finals of the University of Chicago GSB New Venture Challenge.  Overall, I was impressed with the quality of the businesses that presented. There were a number of groups who had solid ideas that were extremely well researched and well beyond the idea stage. First place went to Braintree Financial, and it was well deserved.

The GSB is racking up quite a track record: 2005 winner PrepMe, and 2006 winner GrubHub are two of the most promising internet start-ups in Chicago right now. I think Braintree will live up to the bar these two have set.

Two weeks prior I attended the DePaul new venture challenge. Overall, the caliber of business was much higher at the GSB, but it’s great to see that two of the three DePaul finalists were internet businesses: QuadMarket and DANCE NETWORKS (who won first place, no link yet).

Seth Godin has impressed me enough with his ideas that I’m willing to wake up at 6:30am to hear him speak. About 150 other people joined me at Maggiano’s this morning to hear about his new book, The Dip. I’ll recap:

If the goal that you’ve set for yourself is not one that you can be the best in the world at, stop wasting your time. Pick another goal.

Identify all the projects you have on your plate, and cancel all of them that aren’t getting any better. Free up your resources to pursue the one you can be the best at.

That’s my summary, not a quote. He said a lot of things that didn’t tie together coherently, but this point is valuable enough it’s worth highlighting (it’s articulated much better in the book Now, Discover Your Strengths).

The point for entrepreneurs: if your business cannot be #1 in the category you’re competing in, pick a new business OR re-define the category. The first person to fly across the Atlantic Ocean solo: Charles Lindbergh. Who is the second? No one remembers. But the first woman to fly across the Atlantic solo: Amelia Earhart. That is an example from The 22 Immutable Laws of Marketing (cheesy title, but great book!)

The challenge is creating a category that is meaningful to your customers.

For anyone who feels like nothing is going on in Chicago, here is just a sampling of some tech news from the last couple months:

• LiquidTalk closed a round of funding “in the millions”
• GrubHub launched a new version of their site
• Viewpoints Network has launched their beta site
• Cappex and a solid team behind the company has launched (Well maybe not “launched”, but the site is up and they started to talk about what they’re doing.)
• CondoPerks launched their beta service

New companies/services on my radar:

• rCache - a personal research tool
• Neighborhood - a service like Google Local
• Complaints.com - a service for filing complaints against companies, a bit like Better Business Bureau
• PeerSight - bringing entrepreneurs together
• PreProSports - fantasy college football leagues
• 606tech - new Chicago tech focused blog

Remember five years ago when start-ups would pay their customers cash to use their product?  I admit, I signed up for PayPal because they paid me $5 and used some advertising-loaded browser bar because I got a check each month. To think I could be bought so cheaply… The technique worked to generate customers, but it was just expensive.

I’ve noticed a new trend which is equally as powerful, and much cheaper to execute: give away your traffic. These days, traffic is currency. Thanks to Google AdSense and all the other ad networks, if you have a website that receives traffic, however small, you can convert this traffic into cash. Sure CPM rates vary based on the type of traffic you get, where you place the ads, etc. But the fact that you can reliably convert traffic to cash makes traffic as good as money. Can you give your customers traffic for using your “product.”

The ultimate examples of this today are Digg and TechCrunch. Start-ups are climbing all over each other to get a mention on these sites, but how can you use this technique without turning your website into a news portal?

Justin Chen recently told me about a creative example of this:

Each time a foodie blog reviews a new restaurant, at the bottom of the blog post they put a widget that links to this restaurant’s homepage on Urban Spoon. Urban Spoon detects this incoming link and automatically adds the blog’s review to the restaurant’s page (scroll down to the section, “Blog Reviews of …”).

Despite the fact that Urban Spoon needs some work as a site, this idea is fantastic. It’s a huge incentive for all these foodie blogs to link in.

One more example. I see the MyBlogLog widget on almost every blog I go to these days. Apparently one of the reasons that bloggers add this, and keep this, on their site is because of the incoming traffic that it generates. If you click one of the faces, you’re taken to that person’s profile page and you see all the other sites they are reading… and you probably click one of the sites.

As soon as bloggers start to notice a lot of referring traffic coming to them from MyBlogLog, Urban Spoon, or your site,  you’ve probably hooked them for life.

Recently I attended the Web 2.0 Expo out in San Francisco. One of the highlights of the conferences was a Q&A with Jeff Bezos.

I’ve met Jeff a few times, he is one of the entrepreneurs I most admire so I’m always keeping an eye on Amazon to see what they’re up to, and I wasn’t expecting to learn a whole lot new from the Q&A… But, just like re-reading a good book and catching something you missed the first time, there was a real gem.

Jeff was talking about their web services strategy (S3, EC2, etc) and said something to this effect (paraphrasing from memory):

Many people are always trying to figure out what’s new–what is going to be the latest trend. We like to focus on what is not changing–what is going to stay around and be needed regardless of what the latest trend is.

AJAX, social networks, video… even if all of those trends pass and are replaced by new online trends, data storage and computing power are still going to be needed. This is just like the entrepreneurs who sold mining supplies during the San Francisco gold rush, and the shipping companies (UPS, FedEx) who delivered all your purchases regardless of which e-commerce company you buy from; it’s great to be at the foundation.

If you’re interested more in Jeff Bezos, there is a great interview with him at the Academy of Achievement.

A good friend gave me this piece of advice about choosing your next career move or business to start:

When you’re playing pool, there are always a number of shots you can sink on any given turn. To win, you have to not only pick a shot that you can sink, you have to pick the shot that puts you in the best position to sink the next shot.

Pick a job or a business by thinking about what you can do well and learn something from, but more importantly, think about where it’s going to lead you to.

I heard Jamie Dimon give essentially the same advice in a different context. He said:

Every time I took a new job, the first thing I did was identify who my replacement was going to be. I then proceeded to work myself out of that job and eliminate the need for myself.

I just heard about a start-up who launched an add-on for SalesForce a couple months ago. They were excited about the prospect because SalesForce has 30,000+ customers, and they need just 1% of those customers purchase the plug-in (or some similar small percentage)! …so far they’ve had a dozen or two download it.

This is a great example of the Chinese Math fallacy. I can’t take any credit for this idea, a friend of mine sent me this article a year ago. But ever since understanding it, I’m amazed how many times I hear versions of this from entrepreneurs.

The fallacy is this:

Just because the percentage of people you need from a larger pool is a very small percentage, that does not necessarily make them easier to acquire. Just because there are a billion people in China and you only need 0.00005% of them to buy your product, that’s still 500 people. In fact, it may actually be easier to acquire 500 customers out of a pool of 1000 than a pool of 1 billion. At least then you can identify exactly the 500 people you are trying to reach. Any way you slice it, 500 people is still 500 people.

It’s worth reading the full article. Don’t make this mistake.

I’ve thought a lot about the tradeoffs of starting an internet company in the Chicago vs the Bay Area. Of course I love living in Chicago, but I want to have a good understanding of what, if anything, I’m missing by not being in SF to know if it could ever justify moving there.

I just heard one of the most interesting answers to date. I was listening to an interview with Scott Rafer, CEO of Feedster and MyBlogLog. Toward the end he touched on what he thinks makes the bay area unique for entrepreneurs.

I’m paraphrasing from memory:

In San Francisco, social pressure is on your side. In other cities, if you are involved with a start-up, you’re a bit of an outcast. People often think your crazy before they even hear the business idea because the very concept of starting a company is out of the norm. In the Bay Area, on the other hand, there is an immense social pressure towards start-ups. Lots of people working for big companies are made to feel that they’re “missing out.” And when it’s the norm rather than the exception, people give you the benefit of the doubt. Nearly everyone has heard some business idea that sounded crazy and ended up making it big.

I think this really gets at the essence of the culture. It’s a great explanation as to why you see a lot of what you see out there. I have experienced this “culture” every time I visit, but I had not identified it and put the words to it. It’s this “benefit of the doubt” that makes it easier to convince others to join you, raise money at early stages, convince your spouse/parents/relatives that it’s okay for you to quite your great job and give this idea a chance, etc. It’s like your swimming downstream.

One caveat, I think this social pressure is a consequence rather than a cause of all the start-up activity over the years. There is something more fundamental about the geography or the culture that originated the phenomonen in the first place.

Paul Graham has a great essay on why Silicon Valley came to be.

Personally, I’m still not sold on SF over Chicago. Notice I’m still here. The jury is still out for me, I love Chicago.

After taking a month off, Chicago Beta is back with the next meetup: Thu, June 7th at 7pm.

RSVP on the website

We’ll have a special guest, Chuck Templeton. Chuck founded OpenTable.com in 1998. Grew it to over 120 employees and raised over $50 million. Currently he is working on a new start-up.

Chuck will answer questions and share some advice on start-ups.

At the lastest Chicago Beta, presentations by:

• Tappity.com
• Text2Store.com
• EZ.no

Click to Watch Video
(Thanks to Business POV for producing this)

Interactive Mediums provided live text messaging voting so the audience could pick their favorite 60-second pitch. The winner: Tappity.

If you missed out on the last Chicago Beta, or just want to re-live the pitches, the video is up!

Click to watch video

The 60 second pitches:

• AudioSnacks
• Humanized
• TimeXchange
• CohesiveFT
• BrainTree Financial
• Zaplee

Thanks to our sponsors for helping make this event possible:

www.digitalbootcamp.com

“0-60 Training” in all popular Web Dev tech.

www.businesspov.com

Video stories about Chicago commerce. Updated weekdays.

www.singlehop.com
A full service managed hosting provider with the the à la Carte Server Management Program

Before Christmas, 74 people gathered in Goose Island for the latest Chicago Beta. Business POV was working the room interviewing a bunch of the attendees, you can watch the interviews here.

And Michael of Digital Bootcamp announced he’s starting a small group round-table of entrepreurs working on a new start-up. The group will get together once a month to check-in with and keep each other on track. If you’re interested, contact Michael Carruth.

Watch the event recap:

Click to watch video

The 60 second pitches:

• Andrew Huff - Gapers Block
• Chris Hill - PerkSpot

Web 2.0 entrepreneur tips:

• Matt Shobe (FeedBurner) - WidgetBox, Yahoo Widgets
• Mike Mangino (Elevated Rails) - Selenium

Thanks to our sponsors for helping make this event possible:

Managed dedicated hosting. 15% discount to Beta attendees.

www.digitalbootcamp.com

“0-60 Training” in all popular Web Dev tech. 10% discount to Beta attendees.

www.businesspov.com

Video stories about Chicago commerce. Updated weekdays.
www.singlehop.com

The Chicago web start-up scene is alive and kicking! At least 50% of the people who attended this month’s Chicago Beta were new faces. I can’t keep my “list of start-ups spotted” updated fast enough to keep up with all the new companies I’m learning about.

Thanks to midPhase for helping make the evening possible:

And thanks to Business POV for covering the event and creating the video you see below. If you haven’t checked out their site, it’s worth a browse.

For all of you that attended, I’d love to hear any feedback you have to offer!

The 60 second pitches:

• Justin Chen - Menuism
• John Hagstrand - MapTeam
• Paul Caswell - Weave The People
• Truls Henriksen - Ecto Prep
• Elliot Hirsch - SwapSimple

Click to watch video

Missed the last event? Here’s a video recap of the companies that pitched.

Special thanks to Mark Sheffler for shooting, editing, and putting this whole thing together. He did a phenomenal job. This is just one of the main video stories about Chicago you can find on his website, www.businesspov.com.

And finally, some feedback from attendees: