Web Apps


Ignoring Angel Investors’ Advice and Other Web 2.0 Pearls

At first glance, the Web 2.0 conference, being held at the Moscone Center in San Francisco, appears tailor-made for today’s audience.

Keynotes are kept short — about 20 minutes each — and follow each other in rapid-fire succession. They’re posted on the Web. The audience is mainly young and armed with multiple mobile devices — several had smartphones and iPads, for instance.

However, things came to a screeching halt when the keynote presenters got on stage to make their presentations Tuesday.

Most of the speakers did the usual keynote dance — provide an extended sales pitch about their company and its super-awesomeness. Some just babbled.

More on these later. Perhaps the only speech that had really useful advice was the one given by Jessica Mah, CEO and a cofounder of inDinero.

The inDinero Experience

Entrepreneurs struggling to get their companies off the ground should disregard advice given by angel investors, Mah told an audience of about 300 people at the conference.

Here’s her back story: While studying computer science at the University of California at Berkeley, she had built a prototype for inDinero and recruited some users, then approached angel investors for funding.

Her company was set up to help business owners monitor the financial health of their companies

“All the angel investors told us to get more users and they might invest in us,” Mah said.

That didn’t seem to make sense to her.

“I thought we wouldn’t necessarily make money even if we got millions of customers,” Mah said. “We started tracking our customers and found nobody was coming back to our site. So we were trying to figure out what they needed.”

Then someone told her that inDinero without financial accounts “is as useless as Facebook is without friends,” Mah said.

“I felt a little misled by angel investors who told us to focus on user acquisition because that wasn’t any help to us at all,” Mah groused.

That’s the same lesson GM learned a long time ago: Relying on bean counters can run your business into the ground.

Praise Ye the Googleplex

Bean counter Hal Varian, chief economist at Google, spent the 20 minutes of his keynote speech proving how valuable Google is to the world.

There was some math involved and an equation or two rose moaning above the churning morass briefly, but it got lost in the verbiage.

Essentially, here’s what Varian told the audience after blending the numbers: Google advertisers get back about seven times what they spend in the value of ad clicks and organic clicks.

The total value in the United States to advertisers and publishers and nonprofits is US$54 billion.

Now that search engines have made search easier, users ask more questions, including nonsensical ones. After weeding out the nonsensical ones — and those that are just queries and hence unanswerable — Varian went to work.

Taking average hourly earnings at $22 and doing complicated things with the time saved doing online searches and the number of questions asked per day, Varian showed that each person saves $1.37 a day by searching online.

Multiply that by the 130 million people employed and we find out we saved $65 billion a year.

Whooptido. Who exactly makes $22 an hour? And how much money do we waste daily by asking stupid questions on Google Search?

Of UIs and AmEx

The concept of user experience took center stage during a keynote from Christian Crumlish, director of consumer experience at AOL, and Erin Malone, a partner at Tangible UX.

The audience learned that you can’t slap a user interface on at the last minute. It takes vision, and Steve Jobs would be the ideal candidate to push that vision. The user must have a great experience, and bringing in a user experience expert can save the day.

Nothing concrete was presented. “We’re the Sonny and Cher of keynotes,” Crumlish said at the beginning of their presentation. Nope, guys, you were more like Tom and Jerry — you interacted well and were funny, but provided the audience nothing of real substance.

Somewhat more concrete information was provided by David Messenger, executive vice president for online and mobile at American Express, in his keynote.

Mobile penetration, social networking, 3G and 4G rollouts and new technologies are driving the growth of digital payments, Messenger said.

Messenger outlined a few more must-haves for success in the digital payments market — it’s all about scale, you have to bridge online and offline, you must have an open platform, you must deal with partners, you must have security and trust, and you must deliver good service.

Then he lightly mentioned the Serve mobile payments platform American Express unveiled Tuesday, plugged it lightly and took off.

Note to other keynote speakers: Try to combine information that’s acceptable with a low-key sales pitch like Messenger did. The audience will love you for it.

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