I spent this evening participating in NextNY’s NycHub event that took place this evening in Midtown, in the shadow’s of this past week’s Silicon Alley 2.0 event (we didn’t mean for it to happen this way). There was a fantastic turn-out - lots of entrepreneurs came out to show their enthusiasm in the New York scene as we debated topics such as why New York doesn’t have a great tech scene, what we can do collectively or individually to help build an entrepreneurial culture here, what the early stage landscape is like, and learned about co-working and Cafe Bricolage in depth.

I feel that this conversation is a never ending debate about why NY should be like San Francisco. I have been extremely vocal in the sense that NY should never become San Francisco as our market is totally different, and we should stop trying to become that type of scene. We have amazing assets here in NY - Madison Avenue, the publishing industry, fashion, finance, textiles, and many other fine industries. These industries are very different than they are out in SF - and because of that, the culture is different, thus affecting early stage startups in terms of technology enabling startups.

As mentioned above, one of the topics was how people can collectively or individually help create an entrepreneurial scene, and I talked about getting into the youth of America and educating them about entrepreneurship. Today’s youth are tomorrow’s leaders. It’s not just a cliche, but it’s true. I have spent many evenings and afternoons lecturing and guest speaking at the National Federation of Teaching Entrepreneurship, Junior Achievement, and many public highschools and colleges across America. What I have found is that in the classroom of highschools, guest speakers tend to be from corporate America. There is no problem with this in terms of providing fantastic speaker resources, but students never really learn what startups and entrepreneurship is all about. I have tried to get out to schools and let students in on our secret called “entrepreneurship.” Eventually, this will not be a secret anymore, and we’ll have a thriving community here in New York of entrepreneurs.

I met some wonderful people this evening and will be reaching out to the folks who were gracious enough to give me their business cards.

I was reading the March 5, 2007 issue of BusinessWeek this evening [Sunday] while catching up on some shows that were DVR’d, and was really intrigued by this week’s cover story: Customer Service Champs. As much as business is numbers, strategy, and smarts, it’s also about service. Whether you’re a business to business, or a business to consumer company, you’re always dealing with a customer. While the product or service is interacting with the customer, it’s extremely important to give the best experience as possible. Many companies in the world have the policy, “the customer is always right.� These companies know how to please a customer and when that happens, more times than not, they keep on coming back. It’s my experience as an entrepreneur and a former product marketing manager that we must provide the best experience with what we build, and if we provide superior service and experiences, customers will champion our brand and product and as Seth Godin says, it’ll become “remarkable.�

This week’s cover story deals with the top Customer Service Champs. To draw a bit of controversy to the story, they kept JetBlue off of the list, where it should have been #4. I personally disagree with what BusinessWeek has done as my feelings is that JetBlue should have certainly been included. Every single company in the world, and even individuals, make mistakes. Mistakes range from all magnitudes, but the one thing we know for certain: JetBlue was not the only company who has had a snafu.

The top 5 of this year’s Customer Service Elite are: USAA (insurance), Four Seasons Hotel (hotels), Cadillac (auto), Nordstrom (retail), and Wegmans Food Markets (supermarket). I am positive that each one of these brands has disgruntled customers. Cadillac, I know for sure has customers who have had poor experiences as my grandfather’s friends have all gotten rid of their Cadillacs due to poor maintenance and support at the dealers.

JetBlue proved that they were human. They have had an unbelievable run so far without any major snafu’s but it was bound to happen. Every single company goes through hard times and this issue stands out in everyone’s mind because it was so recent. JetBlue has managed the post-snafu with world class chutzpah, not only taking the full blame, but showing what they will do in the future to make things better. As an entrepreneur, we learn a lot from our mistakes, and I can assure you, David Neeleman (CEO) and his entire team over at JetBlue are learning quite a bit about what has happened, and they will take significant steps to make sure it doesn’t happen again. I personally will lose faith with JetBlue if this happens again and they do not act accordingly – as they should have learned from their mistakes.

I seem to not be the only one who feels this way. At the time of writing, I am not the only one who shares this opinion. BusinessWeek has a poll on their website and it shows that 80% of respondents also feel that JetBlue should not have been left off of their list. I’d like to see them re-appear, and possibly even showcase how they have gotten through this tough time… they have been a model company.

I was reading the AlwaysOn Winter 2007 Magazine on the subway this afternoon and came across the “VC Deal Pitch� by Simeon Simeonov, a technology partner at Polaris Venture Partners. Before Simeon joined Polaris, he was the Chief Architect at Allaire and Macromedia. The article that he has penned for the magazine talks about a new way to date a venture capitalist before you get married, or in realistic terms, a new way to work together with a venture capitalist before they invest into your company.

Essentially, Simeon talks about how the founding team and would-be investors should work together, on the same side of the table, for a good amount of time to improve the business plan and test the market. This whole dating process only really works in the early stage funding realm and allows you to vet out a venture capital partner who does not share the same vision, culture, and operational expectations that you may have.

This process would only work if it was monogamous, says Simeon. As a founder, you do not want your VC partner to be flirting with other companies in your space. They ultimately will learn quite a bit about your business and have deep insight into your team, so keep it monogamous. Even though both parties will share lots of insight, Simeon also mentions that there should be “no strings attached.� If the relationship isn’t working for either party, it should be able to be terminated without any monetary compensation or consideration.

This is an interesting concept that Simeon proposes. As an entrepreneur, I can see how valuable it would be from an early stage perspective (maybe after seed funding?) but may not work for all startups due to time constraints, multiple VC’s, or other various reasons. What are your thoughts?

Web Worker Daily has a great post that lists 10 new ways to make money online. No, this isn’t the typical Nigerian email spammer opportunity but rather a few good ideas (some better than others) that are easily doable. Below is the list, but check out the full article here, for more details.

1. Offer your professional expertise in an online marketplace
2. Sell photos on stock photography sites
3. Blog for pay
4. Or start your own blog network
5. Provide service and support for open source software
6. Online life coaching
7. Virtually assist other web workers
8. Build services atop Amazon Web Services
9. Write reviews for pay or perks
10. Become a virtual gold farmer

If I were to pick off of this list, I’d go for #5 and/or #1. These are by far and away possibly the easiest to get up and running quickly and provide low to nill out of pocket costs if you have the required skills to do so. Essentially, it’s consulting. Very simple and straight forward - thought this was interesting… boy have times changed!

Microsoft, Starcom, and Millward Brown just released the results to a study they did behind closed doors about people who deliberately avoid advertisements. Profiled by Mike Shields in today’s MediaWeek, he reveals the following:

The report, Lifestyles of the Ad Averse, found that between 10 percent and 15 percent of adults 17-35 fall into the category of “ad avoiders� i.e. folks that don’t like advertising, and generally find it “annoying.�

The two companies, after conducting a series of intense interview and observation sessions with dozens of self-proclaimed avoiders in Denver and New York, discovered two types: passive avoiders who simply can’t be bothered with ads, and active avoiders, whose message to advertisers is “be good or be gone.�

The active group is more likely to be young, tech-savvy men who deliberately consume media that has no ads, like DVDs and satellite radio. The passive group is comprised of women, often parents, who gravitate to leisure activities that are untouched by ads, such as books or board games.

Both groups’ habits make them hard to reach by conventional means. Twelve percent of avoiders surveyed said they watch less than one hour of TV per week versus just 3 percent among non-avoiders. Both index low for listening to the radio and reading magazines. And technology like DVRs and the iPod is only making it easier for these avoiders to shun ads.

So the outcome of the study talks about what a brand should do to not be avoided…. and it’s to be more relevant, interactive, and custom to the environment. Microsoft spent money to find that out? hmmmm…

The CEO of JetBlue has gone on video and posted his speech onto YouTube.

You can watch the video here.

Why I like this? He comes out from behind the corporate firewall and apologizes to all the customers who have been affected during the past week. Not stopping there, he talks about what JetBlue will do to make things better and lays out a few tactics that he is employing companywide.

Great job!

Updated:Â JetBlue has now published the Customer’s Bill of Rights:

http://www.jetblue.com/about/ourcompany/promise/index.html?source=ap_promiseÂ

Sherri and I are headed to Las Vegas to see the Dave Matthews Band during the last weekend in March to celebrate my birthday. I am a huge fan of the Dave Matthews Band and have been to 76+ shows (read this post for my history with the band) and I look forward to adding shows 77/78 onto my resume shortly.

The band is going to be playing the MGM Grand though we are staying at The Hotel @ Mandalay Bay as we’re going to make a nice getaway weekend out of the trip and want to stay clear of the slot machines when we can. I feel like I’m a regular to Las Vegas - been there 3 times in the past year and it was wonderful and I’m not even a real gambler.

The tickets went on sale to the event in early December and we carved out 45 minutes of our Saturday morning to make sure we were online 15 minutes early at Ticketmaster to purchase two tickets to each show (Friday/Saturday). We had a fast Internet connection. We were on a super fast computer. We were 15 minutes early to ticketmaster.com. We got through every Captcha correctly. We ended up with nose bleed seats to both shows. How is this possible?!?! We did everything correct. Am I frustrated? Yes, of course! Beggars can’t be choosers… we did get tickets in the end (upper section!) but how come we didn’t get floor seats?

My guess is that the MGM Grand has reserved most of the floor seats (or even 100 Section) for their high-rollers. They may have even presold the tickets to other hotels that could utilize them for their gamblers. But what about the other music fans…the TRUE fans who aren’t in Las Vegas to gamble, but rather to consume an unbelievable concert full of music, lights, and dancing nancies?

The argument some would utilize is that if I was a true DMB fan, it wouldn’t matter where in the venue I sit. Yes, while I appreciate that I could enjoy the show from anywhere, I love sitting up close and interacting with the band and watching them play off of each other. The energy that radiates from the stage is incredible - and that’s why I love the Dave Matthews Band.

There are places I could turn to: StubHub and sites like TickestNow. Do I want to pay over face value? No, not really. This is frustrating… I am coming all the way from New York City to see the show and am a true fan. I played by all the rules and I got left behind. Not fun.

BTW:Â Dave Matthews has a third child on the way - congratulations!

I am going to start this posting out with a quick anecdote. Around 10pm last night, I was talking over IM with a founder of one of the companies I am actively advising and she has her mind spinning about a new project that she wants to actively and quickly get off the ground. This posting won’t go into whether or not the idea is good, or whether or not she should be focusing on her own current project at it’s infancy phase, but will talk about her mindset about how she was going to market with her idea.

Essentially, she wanted to have the website built quickly by someone she knew, and release it as soon as possible as she had a need for the application. She then mentioned to me a few things about fundraising and so forth – all around this particular new venture.

I quickly applied the brakes. It was almost as if we were driving 100 miles per hour and I pulled the e-brake (emergency brake for those non-car enthusiasts). The conversation quickly went from a fair amount of agreement to a considerable amount of disagreement. My thoughts about this subject are as follows:

1. You do not have a business if you just have a website. I have a blog that gets traffic (albeit not much), but it’s not my business.
2. A business must have a financial/business model around it. The for-profit sector, the majority of businesses, all look to make money. Launching a site blindly without any financials is not just a bad idea, but irresponsible.
3. The operational side of launching a business is time intensive and laborious (filing paperwork, insurance, staffing, etc) and must be done before launch. I personally hate this part, but hey – it must get done.
4. Funding – its one thing to build a website by yourself or employ your cousin/aunt but what happens when the website takes off and you need to pull the resources together and scale it? Who is going to pay for that? Who is going to pay for the filing fees to the government for business formation? Insurance? Liabilities? Where is the money coming from?

The web cuts down the time to market for many businesses. If you’re launching a web-only venture, you can technically be online in a few hours (if you put up a landing page) but make sure before you launch to the world, you have all your ducks aligned. Not only does it make your job easier, but also allows potential partners (business development, funding, sales, etc) to work with you more efficiently.

Over the past 10 years in startup life, I’ve used internal and external development teams on my projects. In my early years, I was a codemonkey and would write my own HTML/PHP for my projects and this allowed me to keep costs low, deploy quickly, and make changes as needed. As the companies matured, I had to hire either freelancers or staff to maintain and build out the sites as my duties changed from the development side to the business side.

In 1999, I started outsourcing quite a bit of business to a team located in Romania. These guys (and gals) knew what they were doing and got things done extremely quick and with fantastic deliverables. They also added their own insight into the project (with approval from myself) and sometimes, built additional components that I had not thought of. Our work got to a point where there was enough volume for them to send a project manager to the USA and we worked extremely close together to fast track projects through the development cycle. Our relationship was and continues to be fantastic.

Many startups ponder the magic question, Should we build our software internally or should we outsource the development of it? There is no right or wrong answer here, it all depends on how you manage it. In order to successfully manage an outsourcing relationship for software (inclusive of web related items), you must have extremely detailed requirements drawn out. Every little detail of the project should read flawlessly and you should make sure that the team who is building the project understands your language and they understand the project as a whole.

Annectodately, I was advising/consulting with a team recently who outsourced an online platform for buying/selling of items to a group in India and they received a finished project that was terrible. Why was it terrible? Because the specs were extremely sloppy and non-detailed. The Indian team essentially had to create this platform from thin air. It’s not enough to tell a team to build something like Digg, MySpace and YouTube. You must develop design specifications, use documents, user flow, an ideal use scenario, and provide as much guidance as possible. If you are extremely detailed oriented, you can benefit from outsourcing because you can potentially save money on development efforts.

A friend in the venture capital industry at a leading firm here in New York said, “For the most part, venture firms like to see entrepreneurs outsource as much of development as possible, but we like to see the most important proprietary advantages developed in house.” I would agree with him here. If you have some intellectual property or significant advantage being built outside of the USA or the confines of your legal reach, you may want to keep extremely close watch over that specific IP.

Ask The VC recently has an entire posting on this subject.

If executed properly, VCs are usually strong supporters of offshore development centers. Not only are development costs reduced, but if customer support is an important part of your company’s success, you’ll more easily be able to provide generous support hours with an offshore office. Furthermore, our experience is that acquirers of companies are also happy to find well-run offshore entities that they can leverage.

The web has allowed us to locate offshore talent much more easily. Service providers registered on sites like Elance, RentaCoder, Odesk, Guru, and other sites all have thousands of registered programmers who could create the next big software project. Familiarize yourself with each one as they all specialize in different things, but this is a good place to start if you’re looking to outsource. For larger projects, you may want to go with a company specializing in outsourced development. These companies may be registered as well on these platforms, but they also probably have a fairly prominent site. One of my buddies, Andras from Dream Interactive in Hungary is an example. They are a very prominent firm in Budapest but they do quite a bit of work for companies all over the world. The team can manage the entire project as well and have all the pieces in place to handle work coming from the USA.
All in all - if you can manage it correctly, go right ahead and outsource. If not (and that’s OK), start finding some local talent and bring it internally….

I have a whole section on this blog dedicated to virtual worlds as I’m fascinated by what they stand for. When you look at them from a macro lense, they potentially are teasing us as to what the web will become in the next few years. Wow. That’s fairly powerful.

Linden Lab, the maker of the ever popular Second Life has just released some significant raw data about the virtual world. Most people would never find this data but I was tipped off by a friend within the organization and while I thumbed through it, it was hard to follow because of all the numbers. I quickly turned these numbers into charts and pictures - and created a document (SecondLifeStats.pdf) to share with the world.

Who should read this document?

• Any Second Life residents
• Any marketers looking to launch some form of campaign/brand within Second Life or any virtual world
• Futurists
• People with a lot of time to kill

On a regular schedule, Linden Lab updates their Economic Statistics page which keeps us all informed of the ongoings of their economy. The data below was taken from their 2/6/2007 extraction.

The PDF is located here as a free download (~3.9mb), and goes much more in depth and hopefully sheds some light as to the population, currency, demographics, residents, and more. Enjoy it. Feel free to spread the world as well- bloggers, press, and anyone else - but please comment and send me feedback. I really look forward to hearing from you.