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I will be speaking at the next DemoCamp Vancouver in March.  DemoCamp is usually an event where speakers show off a product that they have been working on.  I have been consulting with a few companies over the last year or so about how to integrate Geo Location and Location Based Services into their existing applications and services.  Boris Mann from over at Bootup asked me to do a talk and I just couldn’t refuse.

The last time I spoke at a DemoCamp was about 2 years ago.  I was just getting out of the video game industry and had started working on iPhone Development.  Here are 2 slides from that talk:

[Show as slideshow]

[View with PicLens]

I proposed that the magic of the iPhone was going to be the shift towards digital distribution.  The video game industry was (and still largley is) beholden to WalMart and BestBuy.  Everyone is trying to copy the iTunes distribution model these days.  In early 2008, 6 months before the iTunes App Store launched, it wasn’t actually clear if this new distribution model would actually be successful.

Hopefully, I can point out something as insightful this time around, too.

But really, you shouldn’t come to hear me speak.  You should come to hear Matt Galligan.  He will be flying up from Boulder, Colorado to talk about SimpleGeo.  SimpleGeo is building infrastructure for the next generation of location based applications.  It looks like they are up to some very cool stuff.

For my part, I will try not to duplicate what others have said elsewhere.  I am always all about the dollar.  So, I will talk about how to build a viable business in the space.  It’s early in the game, so we will look at revenue models that seem to be working today.  I’ll also point out gaps in the Geo technology stacks.  These gaps are opportunities for companies to build out good products.

Signup and More Information:

DemoCamp Vancouver 10: Geo Edition

When: Thursday March 4th, 2010

Where: Ceili’s Irish Pub. 670 Smithe Street. Vancouver, BC.

Vancouverites suck. There. I said it. If we are not busy complaining about the Olympics we are busy complaining about the rain. If we are not busy complaining about the rain, we are busy complaining about the Canucks.

We are our own worst enemies.

The only thing we are good at is being hospitable. In our home, we should treat guests like family.

In my home or in my city I will treat guests like family.

PERIOD.

I am ashamed of Vancouverites that don’t go out of their way to help guests in our city.

It is OUR city. We either make it BETTER or we make it worse.

The Olympics are our stage. We can be a bunch of dickheads and treat our guests with disrespect.

Or we can rise to the occasion and treat every single person that we meet with honour, respect, and kindness.

Being angry and disrespectful and dishonourable does not prove anything worthwhile. It proves we are angry, disrespectful, and dishonourable.

Be BETTER. Be way BETTER. Be magnitudes BETTER.

The following is a list, in no particular order, of those activities that most commonly elicit Resistance:

…

3) Any diet or health regimen.

…

5) Any activity whose aim is tighter abdominals.

– Steven Pressfield. The War of Art.

Losing weight is easy.

Do 40 minutes of anaerobic activity like lifting weights three times each week.  Do 20 minutes of aerobic activity three times each week. Have egg whites and oatmeal for breakfast, tuna salad for lunch, and a chicken breast with rice for dinner.

3 hours of effort a week for a few weeks and you will have achieved your goal.

Simple, right?

Physiology versus Psychology

- If you correct your mind, the rest of your life will fall into place.

Lao Tzu

I’ve been thinking a lot about problem solving lately and the effect our own brain has on that activity.  I am a technical person.  I tend to break down all challenges into engineering problems and start applying the scientific method.

Losing weight should be easy.  Expend more energy than you consume and you will have achieved your goal.  It is that simple from a physiological perspective.

It’s much more complex from a psychological perspective.  There are a lot of moving parts that you have to manage to achieve your goals.  The brain deals with many concerns over the course of a day.  We use words like focus, motivation, tenacity, determination, and persistence to describe all of this management.  I like to use another word:

obsession |əbˈse sh ən|

noun

• an idea or thought that continually preoccupies or intrudes on a person’s mind : he was in the grip of an obsession he was powerless to resist.

Generally, the term obsession has a negative connotation.  The usual implication is that you don’t have control over your thoughts.

The plan is to tweak our brain just like we would tweak our diet or workout plan.

Before & After Pictures

I will spare you the shirtless pictures.  The first picture is my big, fat head from December 2008.  I peaked at about 197lbs.  The second picture is this morning.  I’m hovering at about 160lbs now.

Before

After

Measure

I have one cup of coffee exactly at 6AM and another one at 3PM.  These are the perfect times for me to drink coffee and the perfect amount.  I know this because I kept a spreadsheet with every coffee I drank for 3 months.

I then correlated it with my timesheets in Harvest.  I track all of my billable and non-billable hours.  I started by tracking just working hours.  It has now expanded into tracking almost every activity.

I also did this with the amount of water I drink and how much I sleep.

You can automate a lot of this tracking.  I use an App on the iPhone called LoseIt to track every calorie I eat.  There is now also a companion website.

I also use Track Your Happiness.  This service sends me an SMS three times a day.  A follow a link on my phone and fill out a survey.  I get a set pretty graphs at the end of the month that correlate how happy I am with what activities I was doing at the time.

Automate

The easiest way to make sure your brain doesn’t get in the way is to not think at all.

The spreadsheet with with your budget probably has a macro that automatically adds up your expenses for the month.  You probably have an email filter setup for that friend that happens to send three emails a day with the subject: “FUNNIEST JOKE IN THE WORLD. LOL”

The same principle applies to your brain.  Do the thinking once, up front and then don’t allow yourself to stray the next time.  If you’ve been to my apartment, you’ve probably seen all of the checklists that I have taped up everywhere.  I scribble on all the windows with dry erase markers.

These are the exact 6 things that I do in the morning.  Every morning.

Checklist

The Future

You probably are not as obsessive as I am.  So, how does this help you?  Well, it probably won’t.

You can start by measuring calorie intake and your happiness.  LoseIt and TrackYourHappines only take a few minutes each day if you carry around an iPhone.

However, the future is little devices that help you automatically measure all of this data.  You may have used a pedometer like the Nike+ system to count the number of steps that you take in a day.  The Fitbit, WakeMate, and Zeo are devices that measure how many calories you expend and how much you sleep amongst other things.

The onus is on you to realize that you are trying to exercise your brain and not just your body.

Conclusion

I did some ridiculous things to drop 37lbs.  I did hot yoga for 90 minutes a day for 30 days straight.  I did two a day workoutf for a month.  I wear 4 layers of clothing when I’m on the elliptical.

But really, that stuff doesn’t matter as much as keeping your head in the game.

The CBC, BCIT, and New Media BC will be hosting the Vancouver iPhone Forum next Tuesday.

Vancouver iPhone Forum

November 24, 2009. 8:00 AM

BCIT Downtown Campus

2nd Floor, 555 Seymour Street

Vancouver, BC

I will be presenting, along with Kevin Kimmett, a session on Touch Interface Design.  Kevin is fantastic designer that works at the CBC.  He has lead the design efforts at the CBC on their iPhone Apps.  He has designed the Hockey Night In Canada App, the CBC Radio App, as well as well as their mobile websites.

Kevin will focus on how the tools and techniques that a designer can employ to create great mobile experiences for touch devices.

I will be focusing on the technical aspects of interface design.  I will go over the mechanics of using the Interface Builder tool.  I will cover Apple’s Human Interface Guidelines.  I will also cover how technical programmers can collaborate effectively with designers.

You can follow the conversation on Twitter.  The hashtag for the event will be #vaniphone.

Yesterday, Apple announced that they would allow In App Purchases for free applications in the iTunes App Store.  Previously, In App Purchases were only available in paid applications.

Software As A Service

This will allow developers to shift away from the Software As A Product model to the Software As A Service model.  We have seen this shift on the Internet over the last decade with the rise of Web services.

Microsoft Office is a product but Google Docs is a service.  iWork is a product but iWork.com is a service.  iPhoto is a product but Flickr.com  and MobileMe is a service.

Going forward, we will see mobile applications integrate much more tightly with web and location services.

Freemium / Free-To-Play

Freemium is a business model that we have seen in the web services world.  Flickr is free for the most part.  A Flickr Pro account is $25/year and buys unlimited storage and analytics.

We will start seeing this model in the mobile application business.

This model is called Free To Play in the video game business.  Zynga allows you to play games like FarmVille for free.  However, you can purchase in-game currency such as coins and experience points.

Subscription

The big rumour is that Apple will release a tablet that will compete with the Amazon Kindle.  In App Purchases will allow magazines and newspapers to charge a subscription for content.  It makes sense that Apple would want to unify the way e-commerce works across all platforms and devices.

The Hidden Asset: Salesforce

Last week Fred Wilson blogged about the hidden asset that local media has.  He used the example of the Village Voice having a large sales team that can go out to businesses to sell advertising around their content.

The New York Times also mentioned how Old and New Media are finding partnerships that work well.  They also use the Village Voice as an example.

Fred Wilson is a managing partner at Union Square Ventures.  Union Square Ventures led the last round of financing of Foursquare.

Mobile and the Salesforce

Foursquare is a location-based, social network with a few game mechanics sprinkled on top.  It’s intended to be accessed from a smartphone.  There is an iPhone App along with a mobile website that can be accessed from other smartphones.

Fred mentions how Targetspot and Clickable are attempting to fill a gap by competing with the sales teams that local media companies have built.

He does not mention how this is also relevant in the world of location-based services.

The competitive advantage that YellowPages and other incumbent directory services have are their large sales teams, too.  YellowPages can assign a sales person to every single business in a neighbourhood.  The second competitive advantage is the large database of listings that YellowPages has accumulated.

The competitive advantage that Foursquare and other location-based services have is that they can target listings much more precisely than a generic directory service.

Digital Media’s Competitive Advantage: Crowd-sourcing

Foursquare has been using crowd-sourcing to populate their database in Vancouver.  6S Marketing has also been promoting Foursquare here in Vancouver.  You can read up about it in this Vancouver Sun story.

Aside: Ignore the term social media. Calling Foursquare social media is like calling World of Warcraft social media.  The term has been so diluted that it is basically meaningless now.

My understanding is that 6S Marketing is not getting paid for the promotion.  They charge local businesses for Mayor Offers and Special Offers Nearby inside of the application.  They have become the sales team.

However, this is a stop-gap solution.  In the future the sales of ads will be crowd-sourced too.  Buying advertisement in location-based services will be self-serve and sales teams will no longer be required.

Reading Tea Leaves

The location-based services market will be huge in the upcoming years.  We will see the decline of traditional directory services like the YellowPages.  YellowPages just can not target advertising like newer services can.  They also can not provide analytics as to how well the ads are working.

In the short term, advertising for these location-based services will require a middle man.  The big $1 Billion exit in the mobile/local space will be a company that can acquire ad inventory that can be locally targeted.

Think: The DoubleClick of mobile/local.

I was interviewed Tuesday morning for The Early Edition on the CBC.  The interview was about the Gold Rush nature of the iTunes Application Store.

The interview was later edited for the web.  Apps golden for Vancouver iPhone programmer.

Land Grab

The top 100 or so Apps in each category generate sustainable revenue for developers.  However, there are 80,000 or so Apps in the store currently.  The previous 18 months have been a land grab.  Developers have tried to generate as many downloads as possible in the space.

This strategy has led to price pressures.  The price of Apps has tended toward $0.99.  This is not sustainable for most developers.  The number of downloads at that price point have to be large to recoup the cost of development.

The other issue is that successful applications at the $0.99 price point will be quickly cloned.  There is no room for differentiation at that price point.  And differentiating based on price point is not differentiation.

Optimize For Other Metrics

Most developers have been looking at the number of downloads as the sole metric to optimize.  This is no longer the case for Apps that have shifted away from the Software-As-A-Product model to the Software-As-A-Service model.

The future of Apps is to smooth out the revenue generated from users.  Currently, the lifetime value of a customer is the $0.99 that they spent when they first downloaded the application.

As the model shifts to SaaS other metrics will become much more important.

How many times is the App launched?  100 downloads of an App with the App being launched 10 times is much more sustainable than an App that is downloaded 1000 times, launched once, and then deleted.

How long is the App launched for?  This is the attention metric.  As the amount of content becomes abundant the scarcity becomes attention.

Monetize this scarcity.  The first step to monetization is measurement.

It’s been widely reported that Apple has acquired Placebase. (TechCrunch, TUAW).  Placebase is a mapping company that adds a layer of intelligence on top of map data.

Currently, Apple uses Google Maps for Maps.App on the iPhone.  A native Google Latitude client is not available for the iPhone.  There is some fuzziness as to whether Apple rejected the App or if Google decided to only support Google Latitude in the browser.

Let’s place this deal in context and take a look at the big picture.  We do know that Apple is building an internal Geo Team.  This team is most likely responsible for the UIMapKit framework, the Maps.App for the iPhone, and the Find My iPhone feature in MobileMe.

Let’s follow the money trail.  The big players in the space are Google Maps, Yahoo Maps, Microsoft/Bing Maps, and MapQuest.

The first important piece of insight is that all of these big players get their mapping data from either NavTeq or from Tele Atlas.  The big players in the space don’t own the mapping data.  They provide a layer of intelligence on top of the data.

The second important piece of insight is that Navteq was acquired by Nokia.

This means that money travels from Apple’s coffers all the way to Nokia’s coffers each time an iPhone is sold.

There is no reason Apple couldn’t get map data directly from Navteq (or more likely Tele Atlas) and provide their own level of intelligence on top of this data.  I believe this deal is more about hedging against Nokia/Navteq than it is about Google.

Apple needs to differentiate against Nokia and Google Android devices as well as protect themselves from the rug being pulled out from under them.

I believe Apple is going to be aggressively adding features to MobileMe with Geo/Maps being one key facet.

Recently, I was forwarded an email from a group of commerce students.  They were assigned a project to startup a new venture that they would pitch to investors.  They had a product plan but they didn’t know where to start with a strategic financial plan.

I quickly scrapped together an email response in 5 minutes.  I thought it may be useful to others:

Hmm, in one email? I could talk about this all day.

They want to build a capitalization table. Value the company at something like $250,000 per founder. Look up the terms pre-money valuation, post-money valuation.

http://en.wikipedia.org/wiki/Pre-money_valuation

http://en.wikipedia.org/wiki/Post-money_valuation

Next would be building a dashboard on how you’re going to make money. Sometimes called your business model.

_________  Status | Conversion % | Estimated Value
Acquisition
Activation
Retention
Referral
Revenue

Then calculate the lifetime value of your customer. How much revenue will one customer bring in? How long will they be a customer?

http://en.wikipedia.org/wiki/Customer_lifetime_value

Another term that they want to look up is ARPU: The Average Revenue Per User

http://en.wikipedia.org/wiki/Average_revenue_per_user

Finally, the goal is to secure a term sheet from an investor:

http://en.wikipedia.org/wiki/Term_sheet

http://www.thefunded.com/funds/item/5936

Also, they need to figure out why they want to take on funding. Usually you take on funding to scale up the business. Would you hire more staff? More equipment? More advertising? They want to put together a cash flow statement. The most important item will be the burn rate:

http://en.wikipedia.org/wiki/Burn_rate

Put together a cash flow statement that takes into account current conditions. Then put together what a cash flow statement would look like after you take on investment.

Anyone else have any suggestions?  Did I miss anything?

Brad Feld is a venture capitalist from Boulder, Colorado. He is a Managing Director at The Foundry Group and is involved in the startup mentorship group called TechStars that provides seed founding.

The good folks at Bootup Labs brought Brad Feld up to Vancouver last week to riff on entrepreneurship and business.  Brad wrote about his visit at his blog.

The video of the event should be up in the next few days.

I have been going to these types of events for about a year and a half now.  There have been a number of issues that always come at these talks.  I’ll summarize the talk from my point of view and what the major takeaways were.

Silicon Valley Envy

There is this prevailing attitude in Vancouver that we need to be more like Silicon Valley.  Brad seems to encounter this same issue in Colorado.  There is this underlying inferiority complex that there isn’t enough talent in Vancouver or there aren’t enough investment dollars.

This topic annoys the hell out of me.  I swear I will throw a shoe if I hear about this again.

Ideas & Napkins

“That’s not how background processing and push notifications will work in iPhone OS 3.0.”

“Applications lives in a sandbox and can not access external files for security reasons.”

“That market doesn’t have money to spend.  Look at so-and-so business.”

“Your attach rate is overly optimistic.  Here are the numbers for so-and-so product.”

“There is not enough bandwidth on the 3G network for that.  Wifi may work.”

“You could do that.  If the battery was connected to a nuclear reactor.”

Everyone has the best game design idea EVAR!  And everyone also has the best idea EVAR for iPhone Apps.  I have been living, eating, and breathing this platform for over a year.  I’ve been working in the game development industry longer than that.

I get pitched new ideas on a weekly basis.  Unfortunately, I have to spend a chunk of every single day shooting down ideas because there is some inherent technical or business flaw.

There were a number of questions from entrepreneurs that had an idea on the back of a napkin and an NDA and wanted to raise funding and build a team.

At this point, the best thing an entrepreneur can do is build a TODO list of all the features that needs to be built to get a prototype up and going.  If they are not technically inclined they should fire up Photoshop or buy a big stack of index cards from Staples.

Make mockups.  Build a paper prototype.  Execute on the idea in any which way that you can.

Next, build another TODO list of everything that needs to be done to make money.  Businesses are supposed to make money. Remember?

Fear & Failure

I have been running the business for 14 months now.  I still wake up every morning scared out of my mind.  I know exactly how long I have until the business runs out of cash.

I rub the sleep out my eyes and scream “YES! YES! YES! YES!” about 80 times before my feet land on the floor.  There was discussion about the amount of risk taking that happens in Vancouver.  This has actually improved a magnitude over the last year.  With the economy tanking, people have realized that there is no such thing as job security.  There was never such a thing as job security.  People are afraid and are thinking about taking more risk.

Fear is good.  It’s there to let you know that what you are working on is important.

Resistance is experienced as fear; the degree of fear equates to the strength of Resistance.  Therefore the more fear we feel about a specific enterprise, the more certain we can bethat that enterprise is important to us and to the growth of our soul.  That’s why we feel so much Resistance.  If it meant nothing to us, there’d be no Resistance.

– Steven Pressfield.  The War of Art

Lead & Do

Brad was emphatic when he brought up this point.  This is what successful entrepreneurs do every single day.

You have to lead in some way.  It may be all about being first to market.  It may be figuring out what customers actually want.  It may be all about building a brand that people care about.

But it is also about building a team and having people follow you on your mission.  You are going to need help.  Wheelbarrows full of help.

Mentorship

There are  facets of the business that I’m still not good at.  This is the point where I bring in outside people to help out.

I am happy to answer technical or business questions that I have real world experience with.  Most people in the community here are happy to answer questions as well.  This was a big point that most of the experienced entrepreneurs raised.  Most are happy to answer question.

I send out emails and do background checks on every single client that I’m thinking about taking a contract.

Twitter

You can follow Brad Feld and myself on Twitter.  The hashtag for the event was #blesfeld.