Web Services

Michael Robertson, founder of mp3.com, is launching a webservice called Ajaxwrite.com, which allows you to create documents in an online word processor and save them to your hard drive in Word format in the event that you need to share them with anyone who uses Microsoft Word.

In true Web 2.0 fashion, Robertson is rolling out a beta and adding new features every week for the next two months. His business model is yet to be defined. Robertson is a revolutionary. His mp3.com challenged the music industry’s fundamental business model. I heard him speak in Silicon Valley in 2000 and basically convince everyone in a skeptical audience that once you purchase music once, you should own it forever, and be able to move it from device to device and from format to format. He hated the fact that the music industry made so much money selling the same content to us multiple times (8-track, cassettes, records, CDs, mp3s) so we could listen on different devices.

His Linspire company (formerly Lindows) is trying to take on Microsoft Windows with a Linux based desktop. (I bought a $300 PC from Wal-Mart that had Lindows on it, and it didn’t do anything for me. I turned it on once and never looked at it again.) And now Ajaxwrite.com is trying to disrupt Microsoft Word and Office.

I glanced at it briefly this morning, and it doesn’t seem right yet. I know skeptics will say no one will want to use an online word processor. But, I will predict that sooner or later this approach (free online software in Ajax) will dramatically disrupt Microsoft’s software business. Microsoft will actually adopt this model as well, out of necessity. We’ll wake up one day a few years from now buying powerful $100 PCs and using free online software for most of our productivity applications. Most of our software will be subsidized by some kind of online advertising, like gmail is today.

The good news is that billions of consumers will have access to information and software that will empower them. The other good news is that software and information companies will have to add value by going up the application stack and doing new and innovative things. The bad news is that a lot of big software companies are going to suffer from this new approach and consumers will be confused for a while while new winners are chosen in the fast-moving marketplace.

Employee Needs and Company Goals

Yesterday we held an all-hands meeting for Provo Labs where our team all met each other for the first time. It turned into a three hour meeting, which is too long for me, but I think it was useful. We talked about our business model and each of our portfolio companies briefly.

As we incubate companies, we need to make them cash flow positive on our own small investment or we need to prepare them to be fundable by angels or VCs. John Richards spoke to our team about what it takes to be fundable. His top four criteria are: 1) the right CEO 2) a clean cap table 3) great financial projections model integrated with P&L and Balance Sheet and 4) the right person leading marketing/sales. He elucidated on each one of these.

Every member of our Provo Labs team had a minute to express the single thing they personally need to be more successful. Here’s my list:

1. A better solution for sending personalized emails to a large list of contacts stored in excel, rather than the current Excel Macro that is being used.
2. To have our Knowledge Manager (codename) finished, which, when it is done, will allow anyone to launch a full-featured web site in minutes
3. Testing resources and machines for a new web service that is nearly finished
4. Nothing
5. To have the spin out of TenSpeed Media completed (including new offices, cap table, and investment from Provo Labs)
6. Figure out how to spin out companies, including the accounting
7. A schedule of what projects need to be completed and when
8. To know what hardware (with OS and services) is going to be needed as we build new projects/companies
9. A work flow process along with communication and training
10. A checklist that goes along with our company processes
11. A LAN with a file server for internal collaboration
12. A central knowledge base where all our portfolio companies can share information and code snippets with each other, so we don’t duplicate efforts
13. When we get content from web sites/publishers, to know which web sites/search engines it will be used on
14. To know what our web sites are going to look like before we start coding them
15. A flexible license agreement that we can use with all our content partners

I might have missed a couple items.

I have agreed (under pressure, because I don’t like meetings) to do a brief managers meeting on Tuesdays and Thursdays and I volunteer to have a company meeting every Friday. I understand Larry Page and Sergey Brin still have a Google company meeting on Fridays where they answer any questions from anyone. I have heard that it is a very open forum. I like that approach.

I told the team what I needed most was for each one of them to have a personal success that will permanently change them and how they view work and the internet. I want them to have the experience of having a great idea, quickly implementing it, and then watching it succeed — all within a very short period of time, say 24 hours.

For example, if a member of our content acquisition team identifies a great new database that we should publish, I want them to be able to download it, have it data prepped and added to our live web site, and to have an email sent out to our customer database and distribution partners about it, and a press release issued, and hundreds of new keywords bid on in Google and Yahoo, so that within a day, thousands of people have used our new content, have given us feedback on our customer feedback site, and have taken a survey to tell us what they think of it. Knowing that your idea turned into reality and actually affected a lot of people in a short period of time permanently changes you.

A similar example could be described for a developer who has an idea that gets implemented into our Knowledge Manager (I think we should change the name to Website Manager or something else) and is coded and rolled out onto multiple web sites with a measureble positive impact.

I have watched friends and students have a transforming experience when they realize that you can go from idea to implementation to rapid adoption by users, in ways that were impossible before the internet.

But most employees have so many dependencies, and most companies have such a bureaucracy and a waiting list, that employees stop even having ideas because they know they won’t go anywhere.

I remember heading up a project at MyFamily.com a few years back (Note: I am no longer involved there as an officer or director.) It was extremely revealing to me about how company goals don’t often align with individual employee efforts and how unempowered many employees are.

I surveyed almost 100 employees and asked them each the following questions:
1. What is your key goal/metric?
2. What reporting tool do you use to measure your success?
3. What resources are available to you to accomplish your goals?
4. What dependencies might get in the way of you succeeding.

I have been a big “The Game of Work” fan, so I believe that every individual should have a personal scorecard that measures the results they are generating. And I believe in individual and team goals.

I found, however, that most employees didn’t have a goal that aligned with the company’s overall goals, or they didn’t have one at all.

Most didn’t have a report that they could look at to see how successful they were, although many people in sales and marketing did.

If a company has solid goals, and then conducts a survey like this, they can answer this question: if every individual achieves his/her individual goals, will the company achieve its overall goals?

If the answer is no, then individual goals will need to be changed, or the company’s goals will need to conform to what the individuals can achieve.

I like to keep track of key metrics every day. At 10x marketing we developed a daily scorecard system for each of our clients that showed how many web site visitors they were getting from various channels, what the conversion rate was, and what the overall daily revenue was.

Dan Oaks at DVO.com has adopted this system and improved it over the years, so that his company is a daily internet marketing machine. He showed my BYU class how he manages his company. It is so impressive.

It’s amazing what happens over time if you measure the right things every day and make sure employees are empowered and aligned.

That is where we want to be.

Anonymous is a Coward

I don’t mind criticism when it is private and communicated with a motivation to help. In fact, I’ve been very grateful in my life for harsh private advice that helped me change my course.

I know I have a ton of weaknesses. That’s why I try to learn so much and work so hard. And I’ve got a long ways to go.

But anonymous public criticism, or behind the back complaining, is both cowardly and unproductive. I am not sure if it makes the critic feel good inside, or feel smarter or better than the person they are tearing down. I certainly don’t understand it or like it.

The other day I blogged about talking with your customers. I love talking with customers and am doing a lot to get feedback from dozens of LDS Media customers, where I am currently CEO.

Someone posted this comment (pretending they were Dan Taggart, my friend and business partner):

Try making a profit for once in your life. Look in the mirror and see how scattered you are.

Most anonymous criticism is completely uninformed. Is this critic trying to say I’ve never started or run a profitable company? This is absurd. (The scattered part I plead guilty to. That is what you do in an incubator. You try a ton of things and see what works and then do more of that.)

The worst anonymous public comment ever made about me (maybe there have been a lot worse ones in private!) was this post to f—company back on Dec 26, 2000 just days before it became public that my brother Curt was going to leave the company (he had been serving as Chairman). This must have been posted by an investor or insiders, because the Chairman change was not yet public. Here was the post:

re: Thoughts on your founders? Dec 26 2000 11:03AM EST

The founders of MyFamily.com are Curt Allen, Dan Taggart, and Paul Allen (not to be confused with Microsoft’s Paul Allen). Curt and Paul are brothers.

Curt Allen has the most business sense of the three. As of this writing, he has been asked to step down as Chairman by the MyFamily Board . . . . He used to be Chairman & CEO of Folio. Folio was built by Curt’s father and turned over to Curt to run before being sold to OpenMarket. Further back in his professional career he worked for Hewlett Packard. . . .
His exit as Chairman in December 2000 will essentially end his influence over the day to day operations of MyFamily.com Inc. Look for Curt to resurface not at MyFamily’s potential offshoot, but at another Utah software startup.

Dan Taggart is currently on the board but is no longer affiliated with MyFamily.com in an managerial capacity. He was the VP over Ancestry when he left the company 1 year ago. Prior to MyFamily he was President of Infobases, a religious CD manufacturer with strong ties to the Mormon church. Both at Infobases and Ancestry his success was strongly derived from the Mormon economic base: an economic base that is small, but is strongly supportive of products that focus on the theological standards of Mormonism (Ancestry-Genealogy, InfoBases-Mormon Doctrine).

Dan is trying to erect his own company that will help Internet start-ups with their business cases. . . .

Paul Allen is still with MyFamily.com as the VP over the MyFamily website. He has made a living off the success of Dan Taggart and Curt Allen. He formerly worked at Folio with Curt and at Infobases with Dan. The positions he held at both companies were created especially for Paul. Paul is affectionally called “Corky” by some external investors. This is a reference to the character played by the mentally impaired actor Chris Burke on ABC’s “Life Goes On” television series. This is a fitting reference for those who have met Paul. He is key player on the “MyFamily show”, but is embarrassingly inept at putting cohesive sentences together in front of his audience and is only affiliated with MyFamily because of his family connections (not his skills). He is pulling down a hefty salary for someone of his qualifications and limited capacity. Expect Paul to exit soon since both Curt and Dan are no longer working at MyFamily. He will presumably pop-up at either Dan or Curt’s start-up companies.

I’ve deleted the worst things said about Curt and Dan, but I feel at liberty to include word for word what was said about me.

This was certainly a kick in the face at a time when the company I founded was being taken over by outside investors and the management they had chosen, as well as some new management from Third Age Media, a company that MyFamily acquired in November 2000.

Many facts in the post are completely wrong. My father didn’t start Folio. Curt did. Dan and I started Infobases and Ancestry, so my job wasn’t given to me because of my family connections. When Dan was President of Infobases, I was CEO. (We actually flipped a coin back in 1990 or 1991 to see who would get which title.)

I continue to create my own companies and my own positions at those companies.

But maybe some of the post was accurate.

My high school counsellor told me I was “inarticulate” after my Sterling Scholars interview and I missed out on getting the Spencer W. Kimball scholarship (I was one of 24 finalists in 1983) at BYU for the same reason. My interviews were lousy.

I am sure I was nervous and inarticulate in some board meetings, so somebody really latched onto this and had some fun with it, at my expense and at the expense of Chris Burke, who is a wonderful person with an amazing story.

There were only a very few people who had insider information who could have posted this insulting comment, and I think I know who did it.

Things like this in the harsh business world cause me to repeat to myself the words of a popular song, “I get knocked down, but I get up again, you’re never gonna keep me down.” That is my business theme song.

My advice to everyone is this: don’t believe anonymous public criticism. If a person is a coward, they are also probably a liar, and are tearing someone else down to gain some personal advantage. Never trust anonymous.

P.S. If you want to say some nice things about my improving teaching, speaking, and presentation skills, I would appreciate it, because I have been practicing a lot. :)

(Note: I have not been associated with MyFamily.com since February 2002 as an officer or director. So my opinions are personal.)

Big Databases on Your Site

Provo Labs will soon announce a distributed search engine system that will enable hundreds of web sites to “host” massive databases (like Wikipedia, Edgar filings, dictionaries, reference and travel data, legal data, images collections, and more) on their own sites, with just a few minutes of setup.

We believe this will enable web sites (such as universities, schools and libraries as well as consumer web sites) to keep their site visitors longer and attract more visitors as well. One of our approaches will also help web sites share revenue with us. So there are multiple benefits.

Our worldhistory.com search engine team has built a powerful data indexing system and search system. We will announce our first partner for our first distributed search database next week.

If you are interested in learning more about this new program, please email me at paul AT provolabs.com.

E Learning Platforms

Provo Labs‘ business model is becoming more clear. We will be acquiring a huge amount of content (text, images, audio and video) in selected vertical markets. (First two examples: ldsmedia.com and worldhistory.com).

Then we will offer free access to some important subset of this content (to attract visitors) and paid access to the premium content which we license from our content partners. And of course we will do all kinds of internet marketing: SEM, SEO, affiliate, email, viral.

We will also enable our users to contribute content, tag it, rate it, share it and otherwise add value to what we are offering, thus increasing the value of what we provide.

Finally, and this is the important step that has only become clear in the last two weeks, we will be offering online courses or classes in the vertical markets. We are looking for experts in entrepreneurship, stock market investing, family history, gardening, photography, blogging, and other subjects, who can teach our online courses.

When I was at MyFamily.com in 2000-2001 we knew a RIF was coming. I had the best admin in the world, but I knew her job might be affected but the upcoming cuts. In fact, I felt the entire MyFamily.com division of the company might be shut down. Some of the executives were trying to pull the plug on the entire “free family websites” strategy.

So we had about 30 days to turn my assistant from a “cost center” into a “profit center.” The idea I came up with was for her to find experts in genealogy who could teach an online family history course using the MyFamily.com web site technology as the elearning platform.

Within a month she had found some instructors and launched some successful classes. I think she generated $14,000 in the first month. But alas, she and the rest of the MyFamily business unit were still cut.

The company went on to deliver hundreds of online genealogy classes using the private family web site technology to deliver them. They continue to offer them today.

So Provo Labs will follow a similar path. It is a good way to generate revenue by combining content and community.

But, what we don’t have yet is an e-learning platform that will work well for us.

So, please, dear reader, let me know if you’ve ever taken a wonderful online class, and who you took it from. Or if you know of a great e-learning platform (Phil is looking at one open source project that starts with a k- I think) where we could plug in our content/search engine, our expert, and our community, and start generating revenue and a whole lotta learning.

Note: I am no longer a director or employee of MyFamily.com. I left management in February 2002. My opinions are purely my own fantasies and in no way reflect any reality of what is going on there. (I’ve been asked to write disclaimers whenever I blog about MyFamily.com)

Huge increase in Provo Labs traffic

I’m not sure what is happening, but Provo Labs web site traffic has jumped dramatically. I’m guessing it is because we now aggregate all the blogs from all our employees and portfolio companies on our Provo Labs Planet. I just spent 10 minutes reading posts from the last week or so was amazed at how smart all those Provo Labs people are. The coolest thing about reading all these posts is that I work with all these people, and if I want to learn about things they have blogged about I can email them, call them on their cell phone or IM them. It is truly a pleasure to work with people who are constantly learning and sharing what they learn. Tim Sanders (author of “Love is the Killer App“) would be proud of the Lovecats that Provo Labs is attracting.

Are You Talking to Your Customers?

Imagine working for years at a company, developing products or services, and not knowing what your customers think of them. I think the vast majority of employees are in that situation–nearly completely disconnected from their customers. Yes, companies have technical support people and sales people who talk to customers, but what about executives and senior managers? The people making the big decisions often have little if any “customer capital” — or knowledge of what the customers want and think.

This even happens in internet companies. In 1999 when Curt Allen was CEO of MyFamily.com he asked the management team (about 12 of us) how many of us had talked to a customer in the last 30 days. No one had.

I felt indicted. So I decided to change that. I started having phone calls with customers every week. And I invited others to sit in on the calls with me. We got incredible feedback from some of our best MyFamily.com customers. It was wonderful. It changed our opinions and ideas about so many things.

When I was VP Marketing at MyFamily.com in 2001, I required my marketing employees to spend a day a week at our call center listening to customer calls, so that they could be aware of what the customers were thinking and saying. This had a major impact on all of us.

Now I hear about some of the changes that are happening at Ancestry.com and MyFamily.com and I am absolutely certain that they are not being implemented because our customers are asking for them — but because someone in management is just deciding to make some changes. Like discontinuing the Ancestry Daily News. And pricing. And not providing access to new databases for 10 days every time we post a new one, the way we used to. Huge numbers of people are disappointed by changes like this, but I’m not sure anyone is listening.

Way too many big decisions are made without understanding what the customers want!

(Note: I have not been involved at MyFamily.com since February 2002. My posts are simply my personal opinion.)

In February of this year I assumed management of LDS Media, one of Provo Labs portfolio companies, and quickly realized I wasn’t personally getting feedback from our customers.

So to change that, we put a feedback form on every page of our site. Yesterday I got 11 suggestions from customers and two want to have phone conversations.

I also started a blog for LDSMedia.com which I believe will turn into an ongoing conversation with our customers. Every time we add new content to our search engine we’ll blog about it.

We are going to do the same thing at worldhistory.com and with our other vertical search engines.

The process of asking for input from customers and blogging about it and then acting on their suggestions and blogging when you’ve done it is a wonderful cycle.

I heard a prominent VC in Utah complain that the biggest problem with companies is not understanding what the customers really want.

Every company can easily address this if the CEO will take the lead in asking for and evaluating customer suggestions and in having conversations with them regularly and asking everyone else too as well.

Utah Companies Getting Big, Making Acquisitions

Wasatch Digital IQ has a nice article about Utah’s deal flow in 2005. A great quote from Steve Grizelle about several Utah companies getting big and acquiring other companies.

I’m particularly impressed to learn that SkyWest is now the nation’s largest regional carrier with 2,400 daily flights and 14,000 employees. Here’s a very intesting fact: SkyWest has 380 aircraft compared to Southwest’s 441 aircraft. (Probably a major difference in the size of the aircraft, though, I’m guessing.)

Skywest’s market cap is now $1.6 billion compared to JetBlue’s $1.7 billion and Continental Airline’s $2.2 billion and Southwest’s $14 billion.

I’m also impressed with Headwaters, Inc. and Extra Space Storage, both of which have been growing through acquisitions.

Maybe Governor Huntsman is right. Utah is “the place” for economic growth in the next twenty years. We have the entrepreneurial zeal, the young, educated workforce, and maybe now we are growing enough large companies that we will have enough management talent (people who can manage billion dollar companies) to grow more of our companies into major players, rather than the traditional route of Utah companies being acquired by larger outside players. Maybe the tide is really turning.