Hotel Tonight Vegas CES

Rolling the Dice on Hotel Tonight

As soon as I decided to take a last-minute trip to this year’s CES, where 160,000 consumer electronics manufacturers, reporters, and fans descend upon Las Vegas, I had a hunch that I’d have trouble finding a hotel room. After spending five days scouring Hotels.com, Priceline, Hotwire, and all of the other usual suspects, I had zero luck finding a hotel in my “sweet spot” range of 4- or 5-stars, on or near the strip, and less than $250 per night. (Combining the phrase “zero luck” with a trip to Vegas is bad, I’m guessing.)

Hotel Tonight Vegas CESEach day leading up to the trip, I also checked out Hotel Tonight, searching for hotels in Vegas, but also triangulating my expectations by checking Honolulu and San Francisco, cities where I had a good feeling for the quality and pricing of many hotels.

If you’re not familiar, Hotel Tonight (HT) offers deals for, you guessed it, hotels with a check-in availability of tonight. If I remember correctly, HT began on the premise of giving hotels one final outlet for unused rooms. Or, if you were in need of a last-minute room, or if you liked traveling by the seat of your pants, then HT offered the potential for an amazing deal.

Expectations Set

In the days leading up to CES, the deals on HT looked pretty sweet. Rooms at the Hard Rock were in the $60/nt range, and higher-end hotels, like THEHotel, Vdira, and Aria, were under $200. Some of HT’s deals were only for a single night, while others allowed up to four nights. And, some offered multiple nights with varying prices each night.

Being in need of four nights during one of the biggest events in Vegas, and knowing that many hotels were either totally sold out or charging top-end rates, I decided to roll the dice and give HT a chance. What’s the worst that could happen? Given that Vegas has somewhere around 150,000 hotel rooms, I figured that, if I didn’t have any luck with HT, I’d be able to get something off, off Strip for a reasonable price, even on the same day.

One thing caused me some worry, however: HT deals go live at noon local time, and I’d be in the air until a bit after 2:45 PM Vegas time. Not good, especially if anyone else was considering the same plan. Also, I’m assuming that most hotels only offered up a limited number of rooms at HT’s discount price, so the “good” deals would be snapped up before I had access.

The Reveal

On the day before my departure, Vegas deals on HT didn’t look so great. Prices were higher and options were slim. I considered a few online deals from other travel sites, like the Luxor for $170/nt, but the sense of adventure (yeah, this is adventure for me) pushed me to take the risk and see what happens.

CES Hotel Tonight VegasUpon landing for my connection at SFO, I immediately whipped out my phone and opened HT. Both Bally’s and Rio had deals at $41 for one night only, but both are categorized by HT as just “solid.”

Scrolling further, there were a few off-Strip deals for $47 to $120, and then the “Bonus Luxe Hotel” of Encore at Wynn for only $699, which was $100 cheaper than I’d been seeing it online the previous week (but still about 3x my price ceiling).

HT also listed Palms Place as a “Luxe Impulse Deal” (whatever that is) at only $95 for one night, or $167/nt for two nights. It was off-Strip, but after seeing the word “luxe,” and knowing that it was near a restaurant I wanted to try, I dug deeper. It had a 95% “thumbs up” rating and Wifi was free – something for which the cheaper hotels charged up to and additional $25/night. Although every hotel seemed to charge a $20-30 “resort fee,” which sometimes included WiFi.

Checking the Competition

As a quick check, I looked at the rate for Palms Place on Kayak, Trip Advisor, and Priceline. I should note that Priceline directly competes with HT by offering “Tonight-Only Deals,” but like HT, the deals are only available via their smartphone app. No other service appears to offer a similar tonight-only deal. And, unlike HT, which offers multiple hotels, Priceline appears to offer only a single “tonight-only” deal.

Priceline Tonight OnlyPriceline’s tonight-only deal was for the Hard Rock Hotel at $132/nt, a property that, surprisingly, wasn’t listed on HT, either because they already sold their HT allotment for the day (remember that I was a few hours past the noon listing time), or they didn’t list that day. The price seemed to be an OK deal, but not even close to what I’d been seeing on HT for Hard Rock prior to my trip. (It’s also interesting to note on the screenshot to the right that Priceline clearly offers the Hard Rock at $161 as their non-deal price. But, if you look at the “tonight-only” listing, they show the non-deal price as $162. Sure, it’s only a buck difference, but percentage it let’s them slightly inflate their perceived savings by 0.5%. Ironic considering Priceline “blasted” HT over inflated savings claims…)

For Palms Place specifically, the cost was $167/nt on HT (for 2 nights). Trip Advisor’s app, which lists prices from several services, showed an astronomical $504/nt (for 2 nights). And Kayak, which is usually my go-to travel planning service, along with Hipmonk, listed Palms Place at $403/nt. HT was going to save me over $230/nt! Even if you don’t use HT, it’s surprising how widely the prices ranged for the same hotel across different websites. Regardless of how far out you’re planning, it obviously pays to shop around.

Doubling-down on Hotel Tonight

Since the Palms Place per-night average doubled to $198/nt if I stayed 3 nights, I decided to take this little experiment further and double-down on HT. So I grabbed Palms Place for two nights at $167/nt average, then used HT again midweek to see if I could upgrade to something nicer, cheaper, or on the strip.

As an aside, Palms Place was pretty nice, and definitely worth the price. It’s a residence property, with only some rooms offered as hotel rooms, and seemed virtually empty. I hardly ever saw anyone else, and even the adjoining Palms hotel and casino seemed deserted. And, the on-site N9NE Steakhouse was amazing! The only downside was the $12 taxi ride to and from the strip, since there’s nothing worthwhile within walking distance of the Palms properties.

By mid-week, I was ready to try something new and had been checking HT frequently to see which way prices were trending. Every service showed very high prices on Wednesday and Thursday nights, since that was smack in the middle of CES. But, I was hoping that there would be some last-minute cancellations or adjustments that would open up some deals on HT.

The Hard Rock Hotel seems to be a frequent HT property, and I’d heard a lot about it and was curious to try it. At noon on Wednesday, HT showed the Hard Rock at $90/nt, so my gamble paid off!

HT lists the Hard Rock as “hip,” and it is pretty neat to see all of the rock memorabila around the hotel. The place seemed a bit more crowded than the Palms, but was relatively quiet–except for the loud plumbing (I could hear every flush and shower from adjoining rooms) and the fact that it’s located on the airport’s flight path. I’m definitely older than the Hard Rock’s target demographic, so am probably a bit more critical than their typical guest, but they could stand to slap some paint on the walls and hit the carpeting with a vacuum more frequently.

Upon checking out of a HT-booked hotel, the app asks you for a thumbs up or down rating. Given the state of the hotel vs. my expectations, I gave it a thumbs down. However, at $90/nt, it was definitely a good deal…I just wouldn’t stay there again.

A Tiny Glitch

There’s always something, right?

At Palms Place, HT charged me the advertised room rate, plus taxes. When I checked out of the hotel, Palms Place only charged me the resort fee. At the Hard Rock, however, I was not only billed for a higher room rate at checkout, but the hotel listed my HT credit as only $116 instead of the actual $202. I didn’t bicker with the hotel staff, since they didn’t know anything, and HT asks users to call them before calling the hotel.

Now, not to get off on a tangent, but these are the types of occasions when customer-focused culture really comes into play. For example, when I’ve had issues with my Google Nexus One phone or Nexus 7 tablet, the customer service reps at Google were nice, knowledgeable and believed me when I said, “Yeah, I’ve already rebooted it and cleared the cache.” The Google reps then take the quick and customer-centric route of saying, “Just send it back and we’ll send you a new one.”

On the contrary, when I’ve had to deal with customer service at AT&T or Time-Warner, it’s been they typical slow, backwards, company-centric nightmare that we’ve all come to expect from most corporations.

With HT, I called their support line on a Saturday and was greeted by a friendly rep who took my info, said that she would take care of the issue, and promised to call me back when it was resolved. Even more, the rep asked me about my “thumbs down” rating on Hard Rock and mentioned that they try to always follow up on poor ratings, either via phone or email. That’s pretty good service, and makes me think that HT has really integrated customer service into their organizations as part of their culture. They don’t seem to be outsourced reps or just blindly following a script; they are knowledgeable  efficient, and seem genuinely concerned about the customer’s happiness. How refreshing!

As promised, an HT rep called me a few days later, said that everything was squared away, and that I’d be seeing adjustments on my credit card statement within a few days. Done.

Bottom Line

So what do I think of Hotel Tonight? In a word, it’s awesome! I got two fantastic deals, saving probably $600 or more over four nights (or, getting much nicer hotels for the price).

Given this experience, I’ll definitely use Hotel Tonight again and again, but I’ll be sure to set my expectations by doing some HT recon before I travel. If you’re thinking of trying Hotel Tonight, here’s what I’d recommend:

  • For the city to which you’re traveling, check Hotel Tonight right now, and check it daily for a few days. Get a good look at the hotels they work with, see if several appear again and again, and see if you’re comfortable staying at most of those that are frequently listed.
  • Check several other services to gauge the book-ahead prices. Start narrowing down your list of potential hotels to three or four listed on HT, and keep comparing prices.
  • On the day of your stay, get on HT right at noon (destination time) and book quickly. Be prepared to take your second or third choice. And, check Priceline’s “Tonight-only deal,” just to be sure you’re getting the best deal.
  • Upon checkout, make sure you aren’t charged for the room or the taxes, but only the extras.

Good luck!

 

Additional screenshots…

Kayak Hotels  Trip Advisor Hotels  Hotel Tonight 3

Easing Tech Transfer, ‘Burgh Style

(Note: This post also appears on AlohaStartups.com under a less yinzer title…)

In the many calls and conversations I’ve had with accelerator execs from across the country, many of those in “off-market” areas (i.e. not Silicon Valley) have frequently mentioned the support and involvement of their local universities. Alpha Lab, in Pittsburgh, has a very tight relationship with local universities, and that has been a boon to their accelerator program, allowing them to pull educated entrepreneurs and technical expertise, cutting-edge research, and mostly-baked intellectual property and ideas into their accelerator program.

UNIVAC from Stuck in Customs
Source: Flickr CC “UNIVAC” from Stuck in Customs

In Hawaii, I’ve heard much admittedly second-hand talk about University of Hawaii’s lack of visible involvement in the startup ecosystem, the extreme difficulty in extracting IP and research from UH, and a “me first” approach to business relationships by their researchers and grad students. While I hope to gain more insight from the stakeholders at UH (I’m meeting with Peter Quigley next week, who’s heading up UH’s Innovation Initiative and aims to create $1B research industry in Hawaii), I came across a recent article related to Carnegie Mellon University’s approach to technology transfer and their innovative model for accelerating startup creation (disclosure: I’m a CMU grad).

One push has been to get researchers to take a market-focused approach to research, so that fewer end up with a solution searching for a problem. A second, more critical push has been to ease the actual privatization process – the uncomfortable negotiations to determine who gets what and how much stake the university retains (and at what terms). Aptly-named the “Five Percent, Go in Peace” program, here’s the crux:

  • The university limits its equity to 5%.
  • There are clear royalty guidelines.
  • There is a three-year delay in payments to allow incubation time.
  • There is no university interference in the operation of the company.

The article begins on page 10, but here are the key sections that describe the program (with my highlights in red):

“Most universities view start-ups primarily as money-makers,” Arthur A. Boni, director of the Don Jones Center and the John R. Thorne Chair of Entrepreneurship, explains. “It is very difficult to put a value on an early-stage technology. And that leads to an incredibly tense environment where, every time a faculty member or student wants to spin off a company or commercialize a technology, they have to negotiate against their own university. Who owns what, how do royalties shake out, which rights revert to whom, and so on.”

Or, as Joel Adams, Carnegie Mellon Trustee and prominent venture capitalist, explains, “At most other universities, the number of strings attached to any start-up makes the investment not worth it. It’s just too painful and hard to unwind.”

So, in 2004, the university implemented a policy it called “Five Percent, Go in Peace.” Under this approach, the university expressed a greater interest in fostering start-ups generally, rather than profiting off any one individually, and in providing faculty, students and investors with clear, consistent guidelines and an environment of unconditional encouragement. The university would limit its equity in any for-profit endeavor to 5 percent capped at $2 million (far below any peer institutions), with clear royalty guidelines, a three-year delay in payments to allow incubation time, and virtually no university interference in operations.

“The goal of Five Percent, Go In Peace is to create a transparent, expedient and easy-to-understand process that minimizes extensive negotiations,” said Carnegie Mellon Provost and Executive Vice President Mark Kamlet. “We have simplified our approach to free entrepreneurs so they can do what they do best.”

The results were nearly instantaneous. Since the policy was implemented, the rate of university spin-offs doubled, increasing from 15 or so companies a year to almost two new patentable ideas every week. This Five Percent, Go in Peace policy rapidly became a national model. McCullough was asked to testify before a U.S. House of Representatives Subcommittee on Technology and Innovation to explain its enormous impact, and, with a measure of irony, it has itself been called one of Carnegie Mellon’s great inventions.

From 15 spin-offs per year to 100! I don’t have a calculator handy, but those are amazing results.

Carnegie Mellon further provides support through various other initiatives which, for example, assess an idea’s potential business and commercialization opportunities, match entrepreneurs with investors, mentors, grants and incubation space, and connects entrepreneurs with a fund which provides early-stage capital.

Back to Hawaii, UH’s Innovation Council’s recommendations report includes great steps for improving the situation, but doesn’t mention anything related to easing the commercialization process, royalties, revenues, equity, or related “privatization” issues.

If innovative research is being produced at an accelerated rate and with a large influx of research investment, and students are being educated in entrepreneurship, yet UH forces complex, archaic, selfish limitations on the act of creating a private entity or licensing the IP, then what’s the use?

What Makes an Accelerator Work?

Note: Hawaii’s startup community has been discussing incubators and accelerators for quite a while, and there’s been a lot of recent traction towards having a few of these entities actually launch. In the dozens of conversations I’ve had related to accelerators, however, a lot of challenges remain, particularly around structure, programming, and execution. To share my thoughts, I wrote this post, which originally appeared on Aloha Startups.

 

Content Makes an Accelerator Successful, Not Just Space and Money

Seems like every other person I talk with has a plan for a local incubator or accelerator aimed at helping Hawaii’s startups. There’s accelerator talk on almost every island, there’s interest in a social-impact incubator, there’s an idea for a live/work incubator, and there’s a chat about Hawaii’s first accelerator at this week’s Wetware Wednesday. Even the state government is getting into it—in a good way, for once—with the passage (yay!) of HB2319mandating a “Venture Accelerator Program,” and establishing $2M in venture accelerator funding. (It’s currently awaiting the governor’s signature.)

Tech Incubator at Sea
An entrepreneur wants to build a visa-free, floating tech incubator in international waters. Actually, for state surrounded by thousands of miles of international waters in every direction, this isn’t a bad idea for Hawaii…

While it’s awesome that so much effort is being put into helping our startups grow and flourish, it starts to make you wonder how many such programs can Hawaii support? Are there enough startups to go around? Do we have the expertise locally to run it? Will we need to bring in a portion of the entrepreneurs from the mainland (which is a great idea, IMHO)? And how does this exacerbate (or help?) the “lack of talent” that so many local companies lament?

Accelerate vs. Incubate

In many of the conversations I’ve had, there still needs to be a clearer understanding of the difference between an accelerator and an incubator. The terms are frequently used interchangeably, but are far from the same thing, so let’s get this straight (for the most part…):

  • An incubator helps to incubate ideas into startups, sometimes with money in return for significant equity (~20%, maybe more), and usually with workspace, connections with potential partners and co-founders, education, networking opportunities, advisers, and professional and other support. The term of incubation can last several months to several years. Incubators tend to be localized and supported by governments and/or universities, but not always (Y Combinator is trying out a new program that let’s teams apply without ideas).
  • An accelerator takes very early-stage startups (i.e. have a product, a plan and a team) and helps to accelerate their transition into a viable business, almost always with investment (<10% equity plus access to more investors), high-potential connections and networks, professional support, workspace, and valuable mentoring, guidance, and education. Accelerated companies are usually expected to “graduate” within a few months to a year. Y Combinator, 500 Startups, and TechStars are a few the more well-known tech accelerators.

While even the entities themselves frequently use the terms interchangeably, Inc. magazine has a good article on the differences, Brad Feld had this to say (YouTube, starting at 0:45), as does Pittsburgh Ventures (disclosure: I grew up near Pittsburgh and put a premium on any website whose favicon is a Steelers logo) and many others.

Beyond the terminology and scope, they both have one similarity: it’s not just a space to work and investment, it’s a complete program.

It Takes More than Cash and a Desk

The key components, regardless of what it’s called, are the formalized and structuredopportunities for networking, guidance, education, and mentoring during the program. Workspace is great, but it’s no different than working at a Starbucks if it doesn’t come with access to experts, entrepreneurs with experience (in both success and failure), back office support, sources of funding, partnership potentials, and just straight advice.

Ad Innovation Conference at Y Combinator
Going FAR beyond a desk, Y Combinator held an Ad Innovation Conference designed to showcase companies developing ad-related technologies. (From VentureBeat)

You see, the whole purpose of creating a “space” for startups is to foster relationships that benefit the startup. Without providing connections, expertise, experience and networks that the entrepreneurs can’t get at a coffee shop, it’s really nothing more than a shared workspace. And, without creating some sort of application process to accept only those who are serious and capable, it’s not an accelerator or incubator, it’s a co-working space.

Don’t get me wrong, co-working spaces are fantastic. They fill a valuable niche and give entrepreneurs, remote workers, and others a nice, professional space to get some work done. There’s also opportunity to make great connections and learn something, but it’s usually by chance, not by design, and definitely not required.

Done Right, Accelerators Enhance a Team’s Skills

Look at what Y Combinator offers to their companies, and drill down to their list of speakers: it has names like Marc Andreessen, Marc Benioff, Jack Dorsey, Shawn Fanning, Reid Hoffman, Guy Kawasaki, Stephen Levy, Mark Pincus, Jeremy Stoppelman, Stephen Wolfram, and, well, you get the idea.

Sure, most of those tech “celebrities” live or work within a few miles of Silicon Valley’s accelerators, but it creates a challenge for Hawaii accelerators to develop the right programs featuring the right people. Should they use all local expertise, or bring it in from the mainland? Should they focus on tech, or areas where Hawaii already has vast talent? What should the startups expect of their mentors and of the curriculum? Should they expect to meet with Instagram and Zynga founders, or local execs from Hawaiian Airlines and non-tech successes like Sig Zane?

How are others doing it?

AlphaLabs, for example, provides weekly educational sessions with access to and advice from late-stage startup entrepreneurs, high-level execs from companies such as Microsoft, professors and researchers from local universities, and, of course, venture capitalists. They also provide attention and hands-on support from the AlphaLab team, staff, mentors and advisers, and the local business community.

Momentum Michigan provides a 12-week bootcamp program filled with events and networking opportunities.

TechStars goes further by providing more tangible support, like $5,000 in communications consulting, $10,000 in Paypal processing fees, $25,000 in AWS hosting services, and more. (Very similar to Startup America’s perks…)

500 Startups provides resident mentors and designers who “live and breathe with startups at the accelerator. They give talks, hold office hours, design reviews, hack on product, and provide ongoing support and guidance.”

Yetizen, a creative accelerator focused solely on gaming startups, focuses on four pillars of their approach: Education, Partnerships, Investors, and M&A (exit strategies).  They also offer a deep bench of hands-on expertise, with mentors from Disney, Sony, Google, Visa, and more.

To Improve Success Rates, They Don’t Accept Just Anyone

Most of the top accelerators also have rigorous application processes. TechStars claims “selection rates lower than the Ivy League,” has 25 deep questions on their application page, and requires videos and details of the company’s monetization plans.

Y Combinator asks thought-provoking questions that quickly weed out those who have a half-baked idea, haven’t done the research on their viability, or just plain don’t have the skills:

  • Please tell us about the time you most successfully hacked some (non-computer) system to your advantage. 
  • What do you understand about your business that other companies in it just don’t get?
  • How do or will you make money? How much could you make? (We realize you can’t know precisely, but give your best estimate.)
  • How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won’t be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that? 

It’s also apparent that, to be even considered for a program, you need more than just a great idea. You need the skills, you need to have thought it through, and you need to have created some sort of plan. (It’s funny to hear early entrepreneurs as they bash advice to think about their go-to-market strategy or to create rough revenue projections. Sure, everyone knows that they are just guesses, but you need to have an informed guess to be taken seriously.)

A comprehensive application and vetting process is a lot of work for both the startup and the accelerator, but it creates a high bar that helps to improve the long-term success rate of graduates. It also increases the learning by osmosis. If you’re a stellar team with a real shot at success, do you want to work alongside a lackluster team with a half-baked idea and wavering commitment? No, you don’t.

Garbage in, garbage out, right?

What Should Graduates Expect?

For most tech incubators and accelerators, the “graduation day” is a demo day, complete with press coverage, top-tier judges or feedback, and access to additional funding. That last bit is key, especially in tech.

TechStar grads average over $1M in outside venture capital raised after leaving their program (totaling $155M to date). BoomStartup, in Utah, holds an “Investor Day” with private investors, angel groups, venture capitalists, banks and other members of the ecosystem. Y Combinator’s latest batch of grads all received an additional $150k from prominent angel investors. Launchpad LA, in Los Angeles, has had 33 graduates, of which 27 raised more than $100M, combined, mostly based on connections made by their participation in Launchpad.

While the experience of the program should stand on it’s own, should success also be measured by a grad’s ability to secure additional funding? In the tech world, that’s almost always the case. But, in Hawaii, there’s a clear lack of investors and investment. So should Hawaii’s accelerators focus on different types of companies and expect different outcomes?

It sounds quaint these days, but what about incubating a non-tech company whose goal is a great product that drives profit, not VC investment? Would that take considerably more resources from the accelerator? Is tech the only sector sexy enough to get interest?

An Exciting Time for Hawaii’s Startups

It’s an exciting time to be a startup entrepreneur in Hawaii. From Wetware Wednesdays to Startup Hawaii, and Startup Weekend to accelerators and incubators, the opportunities for local startups to connect, grow, and succeed are becoming bigger and brighter. We’re seeing more and more startups grow beyond the idea stage, more entrepreneurs getting the connections and experience that they need, and more reason for talent to stay in Hawaii and help grow the startup ecosystem.

Regardless of how these first incubators and accelerators perform or how long they last, it’s all pushing us in the right direction. Being a startup entrepreneur is a gamble, and most fail. But, that failure is a learning experience.

For incubators and accelerators, it’s the same. There might be a few that win and a few that fade away, but it’s critical for Hawaii that they continue to try.

What do you think? There are a lot of unanswered questions in this post, so add your thoughts to the comments below…

And, if you’ve read this far you’re obviously interested, so attend Wetware Wednesday on May 23 to share your thoughts with the community.

Aloha!

Rethinking How We Work: HP’s Interview with Jason Fried

I’ll be totally honest:  I wasn’t a huge fan of Basecamp before this week.  Sure, it’s a fine tool for sharing files and managing project-based communications, but it’s not really all that intuitive and it lacks anything more than simple, limited functionality.  We use it at my current company to manage all of our new customer projects, our internal product management and technical release milestones, and even as a repository for our marketing collateral and sales tools.  But other than a central location for messages and file revision management, I just don’t see any compelling value above and beyond existing tools.

I recently watched an interview with Jason Fried, CEO of 37signals and creator of Basecamp and other collaboration and team management tools.  Fried absolutely changed my mindset about what Basecamp is, where its value lies, and why it is an amazing tool perfectly designed to solve a single, simple problem.  Furthermore, he demonstrated the immense value of marketing via thought leadership and by framing the conversation around a much larger issue, in this case the transformation of the workplace.

I’ve embedded the video below, but you can view all of HP’s Input|Output interviews here.  It is well worth the 60-minute investment, and Fried has incredible insights on the evolution of the workplace and how today’s workplace norms are actually counter-productive.  But even more, he has fantastic insights on start-ups, marketing, and how to build a sustainable business.  Here are just a few interesting tidbits:

  • When asked about how his products stack up against the competition, he answers with, “Our products do less than the competition.” That sounds like a tough sell until you hear him explain that they purposefully design simple products that do a limited number of things really well.
  • On why a bootstrapped company has an advantage over a venture-backed one, his concept is that “a venture-backed company has to spend money from day one” while a bootstrapped company has to make money from day one.  An entrepreneur is better off focusing on making money, not spending it.
  • On modeling your company or team after Google or Apple or Amazon, he thinks that just because they exploded doesn’t make it a good model for you.  Those companies, and other super-successful companies, are anomalies.  Model yours after companies in your same space, realm, universe.
  • Working alone, or working remotely, is much more effective than today’s standard of cubes and team workspaces.  On one hand, your biggest interruptions are caused by others talking to or around you.  On the other hand, he thinks that, if you’re denied daily face-to-face interactions, your creativity and productivity skyrockets when you do finally get together.
  • If they need a new tool, they build it.  And, if they needed it, others probably do too, so they sell it.  Obvious, but this is almost a lost art in Silicon Valley – selling a software solution that people already need.

One area where I do disagree with Fried is around marketing in general, which he gets to at the end (around the 57-minute mark).  37signals doesn’t have a marketing person and they don’t believe in the concept of a “marketing department.” Their website reflects that as a run-on mishmash of text, images, videos, quotes, and colors. He estimated that they have spent less than $20k on marketing over the past 5+ years, which is appalling to me.  Yes, they are profitable, but they could be so much more so with a focused market strategy.

I do, however, totally agree with his point that everyone within an organization should have a marketing mindset.  That marketing should permeate every aspect of the business – in the error message, in support, in the product’s button text, etc. – and that marketing is everyone’s responsibility.

If you do watch the entire video, definitely stay to the very end to hear their “commercial.”  It’s very realistic, and effective!

Bottom line:  With marketing as a recognized part of everyone’s role, 37signals has done a great job of succeeding without a dedicated marketing role.  By focusing on the bigger issue (workplace effectiveness), they have elevated the conversation to an intellectual level, well beyond just selling software.  That’s really where Fried shine:  as a visionary.  Someone who I’d want to work with, and someone who can very effectively articulate the bigger picture that drives the success of their product.

Fried did absolutely zero promotion of 37signals during the interview, and that was the best selling tactic he could have used!

Stickybits: Almost a Killer Marketing Tool

I’ve been playing around with Stickybits, a new app-based solution that connects a barcode scanning app for your phone with the ability to generate unique barcodes and attach “bits” (comments, URLs, etc.) that appear when the barcode is scanned. As a marketer, I immediately started thinking of ways to utilize this to expand my company’s presence, awareness, and ability to put content into the hands of our prospects.  I also thought that – as Stickybits promotes on their website – this would be a fantastic addition to a business card.  But once I really drilled down into applying Stickybits as a marketer, things started to unravel.

Stickybit # 6925359849840, better known as "Jason Rushin's resume."

Stickybits was a big hit at this year’s SXSW and has gotten wide coverage from CNET, ReadWriteWeb and others, but the general vibe seems to be, “What will people do with this?”  And therein lies the crux of Stickybits’ challenge:  there are some great ideas beginning to surface, but the execution is still a few versions from solid.

Marketing with Stickybits

For B2B marketing, I immediately thought that this would be a great solution for trade shows and events, where fewer and fewer attendees actually want to add another set of vendor collateral to their already schwag-heavy logo’d backpack.  More often than not, I’m hearing booth visitors ask, “Can you just email me something?”

Now, if we had a big Stickybits barcode that they could just scan and have it pop-up a YouTube video of a product demonstration or PDF collateral or link to our website, that would rock.  But since the barcodes only work with the Stickybits app, the scenario would likely play out like this:

  1. Convince a stranger to add this new Stickybits app to their phone – an app that your company didn’t create and that is essentially bloatware as far as the stranger is concerned.
  2. Wait while they downloaded and installed it, hoping that the connection in the event hall was strong enough for a speedy download.
  3. Explain to them how to use the app, and essentially become a salesperson for Stickybits for a few minutes.
  4. Finally, walk them through getting a snapshot of the barcode quickly, and then explain how they can access your marketing materials within Stickybits.

Let’s assume that you could get past these initial steps, maybe make it fun for people to download the app and not take more than a few minutes of their precious time.  This is where Stickybits really falls down from a usage perspective:  the “bits,” as they refer to the notes attached to a barcode, don’t really pop anything up.  The app just lists the links as text, requiring the user to scroll through and click on the link they want to see.  While this isn’t that big of a deal, it is another step and does dramatically limit the “awesome” factor of the experience.  The bits are formatted much like comments to a blog, so there’s not really any formatting or categorization.  And currently, anyone can attach new bits to the barcode, which totally limits, if not outright eliminates, its usage for corporate marketing.  (Imagine a competitor scanning your barcode then adding their collateral as well…or something worse.  Yes, as the barcode owner, you can delete bits, but you need to do it proactively.)  The final drawback in this scenario is that your links appear on your prospect’s phone, with no obvious way to forward them to an email address for viewing on a bigger screen, passing on to colleagues, or printing.

Stickybits allows you to download a jpg of your barcodes for printing or pasting elsewhere, or you can purchase these pre-printed vinyl stickers directly from Amazon.com(Credit: Amazon.com)

A major hurdle here is the need for the Stickybits app specifically, not just any barcode scanning app.  On my Android phone, I now have four barcode scanning apps, including Stickybits.  Yes, that’s probably a bit excessive but I’m assuming that a good number of people already have at least one, and it would be nice to facilitate that whole process by eliminating the need to download another app just for this one-time scan.  But then again, that’s how Stickybits will become pervasive.

Huge Potential

Despite these drawbacks, the potential here is enormous. Adding a barcode to collateral that drives prospects to a microsite, a special promotion, or a related video would be useful.  A barcode on your event schwag would turn your stress ball into an instant, persistent data sheet.  Barcodes on event badges would be a great idea too, letting attendees scan each other for business card information and whatever else each attendee wanted to attach to their badge.

In addition to corporate marketing, it would be great for a museum to add additional content to each exhibited item, or for a tourism bureau to add backgrounds, photos, and maps to a point-of-interest (wouldn’t it be great to know the details behind a historic building as you snapped the Stickybit attached to the cornerstone plaque?).  It would also be neat as the basis for a self-guided tour, where each barcode gives you info on your current location as well as directions to your next stop on the tour.  Think of the cool tie-ins with augmented reality apps showing what’s around you or what used to be there (say you’re standing at San Francisco’s city hall and you could see photos from the aftermath of the 1906 earthquake).  There could even be links to relevant maps, audio, video, and upcoming events.

My Two Cents on Stickybits

The challenge that I had, and that I’m sure a lot of visitors to stickybits.com have is, “What do I do with it?”  Yes, there are some initial ideas, like the business card or the greeting card, but the execution does not yet live up to the promise.  Reading their forums, it looks like a lot of my concerns are shared by others, and that Stickybits is taking note and promising to address some of them.

In the meantime, I’ll be using the few barcodes that I’ve downloaded, and I’ll be keeping an eye on the Stickybits solution as they advance the capabilities.  It truly does have a ton of potential, and I can’t wait for their next few iterations to add things like branding (which they already allow for product UPC codes), more interactive bits with embedded videos and document viewers, and hopefully the ability to scan Stickybits’ barcodes with other scanning apps.

As an aside, Stickybits’ has an opportunity to improve their website navigation and really get people excited much more quickly.  It took me a lot of random clicking to figure out how to get off of their homepage, but once beyond that, the sidebar menu was very intuitive.  I’m assuming that the average prospect will be unsure how or why to use Stickybits initially, and their website doesn’t do much to help ease the process or make it seem obvious.  I would bring the “few examples” above the fold, or better yet, incorporate those into the three steps in the thought bubble.  I would also bring their site navigation out to the homepage.  Yes, I’m sure they purposely limit the links to ones that prompt visitors to download their app – more downloads equal more potential users – but even that’s not intuitive (you have to click on the “Get the app” guy).

Bottom line:  it’s a killer idea that’s just about six months away from being a killer marketing solution.