codypo

One note here: Experiment 2 isn't exactly passive income, not until I get a lot more comfortable with the code. That's the goal, though, and I think it's the likely choice for the greatest amount of income (and least amount of work) in the long run.

I have had a few interesting experiments here in the past year.

Experiment 0: I bought a hotel affiliate site off of flippa. It did pretty well initially, but I didn't do enough investigation into how the previous owner had been generating traffic. In short, there was a lot of untoward stuff going on. As I was getting all of that straightened out, the site got (deservedly) banned from Google's index for a few key terms. I made my money back and learned a valuable lesson: don't buy sites off of flippa.

Experiment 1: I created a few different sites around a big product launch, and monetized via product reviews and the Amazon Affiliate program. This worked very well for a period of time; the site was grossing $100 a day for several weeks with essentially 0 work. Slowly, my site dipped in the rankings for the key terms as much bigger players got their act together. From this, I learned that one-off sites can be valuable, but probably not in the long term. I should've sold the sites at their peak.

Experiment 2: I wrote some algorithms to find underpriced stocks and then examinate a few strategies around that security's options. This was actually a lot of fun. Based on my program, I ended up buying out-of-the-money puts on 5 or 6 different stocks. I'm sitting on a small profit right now. The next step is to exit my positions, finetune the algorithms based on a few key things I learned, and put more money into action.

Thanks for the shout out, it's always great to hear from a happy user!

You are correct on the business model; right now, it's promotional fees from developers plus device manufacturer licensing fees.

You are also correct that we focus on a different use case than Kyte. It seems to me they're more focused on location and telephony (very worthwhile, btw!), whereas we are all about making it for kids to find and play great apps.

This looks like an excellent implementation of a great idea. It's actually somewhat similar to what we do at Famigo (see http://www.famigo.com/sandbox/), though we're much more about content management and recommendations than GPS and telephony features.

With respect to the location feature, AT&T actually offers a somewhat similar service called AT&T Family Map for a monthly fee of $10-15. I believe that's a white-labeled version of an existing app (it might be Life360, not sure) with some integration into their back office APIs. I really encourage the Kyte folks to do some investigation here; other carriers might be looking to solve similar problems with respect to family location. That is, after all, the carriers' most lucrative market segment.

On the fiction side, I absolutely loved Shogun by Clavell. I didn't know what to expect, and I found an epic that was captivating in many ways. I also started Neil Gaiman's Sandman series. I realize I'm about 10 years behind everyone else, and I've found it most deserving of all of the hubbub.

With respect to nonfiction, I enjoyed Schroeder's recent biography of Warren Buffett, entitled the Snowball. It was much less of a hagiography than much of what you read on him. He's a fascinating, complex man.

Ha, this is actually pretty funny in retrospect. There I was, giving a talk on all of this great stuff we do with our data, having no idea that a good portion of that data had just vanished. The universe has many potent mechanisms for keeping us humble.

For a lighter side of both Steve Russell and Alan Kotok, you absolutely must read Steven Levy's Hackers.

A large chunk of this book deals with the very early computer scene of MIT in the late 1950s and 1960s. Both of those guys played a big role, especially Russell. He developed a game, Spacewar, that just enraptured the whole PDP crowd and led to this mania of gameplay and hacking, gameplay and hacking, etc.

It is really a delightful book. It's great to see these gentlemen recognized for their more formal contributions.

At the very least, this post has given me the title of my forthcoming autobiography: Words that Are Evocative of Sex and Feces.

Unrelated: one thing we've really learned with this launch is the value of a great video. People seem to be responding really well to that as compared to a wall of text, probably because it's much more effective in telling the story behind the product. These videos actually aren't all that expensive, either.

I agree with the author that Chef is an incredibly powerful tool and that it has numerous benefits over plain old bash. However, I'm reluctant to actually use it because of its dependencies. Chef relies on CouchDB, RabbitMQ, and Solr, and all of those have non-trivial dependencies as well. Then, with a stack like that, I worry about the overheard involved.

FWIW, Puppet's dependencies are much simpler. I don't know much about Chef vs Puppet, but I can say that from an installation and dependency maintenance POV, Puppet wins.

Thanks for pointing this out. We JUST pushed a change this week where we removed a huge banner saying "We help families find and manage blahblahblah" and replaced it with a few other things. Maybe we need to revert that!

Blackmail. I have pics of pg and Steve Ballmer sharing an ice cream cone, and I'll make them public unless I get the proper upvotes.

I actually don't know what happened here either. I was at a kid's birthday party, and I look on Twitter to see one of my cofounders had submitted this and that it was shooting up the front page.

Oops, I think I didn't express myself very clearly. When I was sending 20 requests a sec in a load test, the average response time for all the requests was 9 seconds. In a normal case, the page was loading in a fraction of that.

Also, we didn't lack all indexes, just a couple of important ones. We've been iterating quickly on the site and we weren't analyzing the performance as our queries were refactored.

I am legally obligated here to post the Famigo Sandbox. Our app finds the kid-friendly stuff on your phone and builds a sandbox around it, so your kids can play the games thy like without them accidentally sending a text, getting on the Internet, etc. Then we send you an email with what they've been playing, and games we think we'd like.

Other great apps, gaming focused: the Marbians, Alchemy.

If you accept the article's theses that older developers are a big asset AND that they're at a disadvantage in the marketplace due to discrimination, there's an opportunity here. Rather than try to woo and retain 30 hotshot developers in their 20s, it'd be easier to hire 18 or 20 developers in their 40s. The turnover would certainly be lower, the output should be equal (or greater?), and there'd be less need for extensive management oversight.

Anybody know of a company that's tried that approach? If none exist, that leads me to think that either we're onto something interesting or that this approach simply doesn't work.

Excellent idea and very nice execution! The design is great, plus it's incredibly easy to signup and share your registry. You're definitely on to something here.

In terms of suggestions, I'd suggest you tweak your index page a bit. When I landed there, I was most interested in seeing what one of these registries looked like. I assumed that clicking the image of John and Jane's Baby List would show me an example, but it's not currently linked. To actually find an example, you have to think a bit and either find the text link under your Create button or realize that the Showcase link is what you're looking for.

Also, the Vendors page needs a bit of work. I'm sure that's number 7273 on your priority list, but I don't think it'll be very successful in engaging vendors as is.

I agree. Infochimps has a whip-smart group of folks and they're rapidly acquiring the resources needed to be the major player in the data market. Not only that, but knowing a lot of them, they're genuinely decent, helpful people. It's great to see another Austin startup rocking and rolling.

I can vouch for getting together with Louis. He and I have done coffee a couple of times now, and he's got a great perspective on everything from funding to really in-depth technical issues.

I can speak from experience when I say that Austin's entrepreneurial community is welcoming, supportive, and full of very sharp folks. You should definitely check out the Lean Startup group (http://www.meetup.com/Austin-Lean-Startup-Circle/). Our next meetup is a joint holiday mixer with a lot of other Austin groups (like Austin on Rails), and it promises to be a great way to meet a ton of folks.

Also, I'm not sure if you're looking for a workspace with a lot of people in the same position, but we've really benefited from participation in the Austin Technology Incubator.

Edit: why do I say folks so much?

Thanks. Much appreciated!

The scenario I put forward is my current scenario. My wife is due tomorrow (yippee!), I've been to nearly all of the doctor's appointments with her, and I'm cofounder of a startup that's doing quite well.

Sure, I put in plenty of hours, but I never forget the importance of work/life balance. My company is important, but it's not all important.

I disagree that not everyone needs work/life balance. If you're a leader at a company, your employees count on you to make good decisions regarding their future. I don't think you can make reasonable decisions here if you spend all of your time working and thus lose the perspective one gains from an outside life.

Let's say that I'm an employee of yours and I have a pregnant wife. I wish to take off at 3 PM once a week to accompany her to the doctor. I make this pitch to you, my 21 year old CEO who lives at the office. If you're buried in the business all day, every day, could you comprehend how important something like this would be to me? Even if you did say yes, what would you think of my commitment to the company? Would you factor my behavior into your decisions about my future?

You may find great meaning within your work, but others will have much different priorities in their lives. I think you lose your ability to realize that with this sort of workload.

If I were Google's CEO, I'd build a transparent, Internet-driven political election infrastructure. Why? First, having regular, fair, accountable elections is a problem that all countries in the world face. Second, the problem I just described has a technical solution. Third, only a company with tremendous resources like Google could successfully battle the entrenched, questionable powers that control many of these elections and the vote counting therein.

What's in this for Google? Users. Data. Brand awareness with every dang voter in the world. Incredible PR. Continued support of that whole 'do no evil' thing.

Of course, there are some catches here. The system has be to completely open. As a citizen, I should be able to audit every part of this whenever I want. Second, you'd have to abstain from all political contributions. People counting the votes can't have a preference or a vested interest in one part over the other. I'm sure there are more that I haven't thought of.

It'd be a tremendous investment on Google's part, but it has the potential for some truly world-changing technology.

I must point out that, like any other mantra, JFDI must be taken with a grain of salt. Think about the following scenarios. You meet a guru who's willing to advise your startup for a mere 5% of the company. You find an investor who's willing to put in big money, given you tear up your term sheet and use his unconventional terms. You think up a feature that, while consuming vast dev resources, could result in total market domination.

It'd be absurd to JFDI on any of those, not without doing the proper due diligence. For day to day decisions, JFDI is absolutely the way to go. For decisions that could kill your startup, BJAPC (Be Judicious And Proceed Cautiously). Admittedly, that's not as catchy.

edit: formatting.

The Programming Collective Intelligence book on sale here is wonderful! If you want to build software that does something intelligent thanks to the mining of a tremendous set of data (think recommendation engine, price models, content classification, search engine, etc) and you're not sure where to start, start with this book. Not being a CS academic, it's hard to find useful, non-trivial introductions that I can understand on these topics. That's where this book excels. It's one of the few technical books I regularly go back to.

I think this is quite a bit different than the standard lite and full version model. The reason why is because, through in-app purchases, a developer has the potential to realize a lot more revenue per user.

If all you're trying to do is to get someone to upgrade from lite to full, that can only happen once. In-app purchases can happen several times. In Restaurant Story (one of the games mentioned in the article), you buy gems to speed up the process with which you make food. I'd bet that most people who purchase those gems do it more than once, because they're directly tied in to your success at that game. In short, there's the potential here for recurring revenue.

Not only that, but the prices on in-app purchases can be startling! Going back to Restaurant Story, I think the smallest batch of gems you can buy is $5 and it goes all the way to $99. That's a lot more revenue per user, potentially, than on an upgrade from lite to full.

Happy to help! It definitely looks compelling, and you're well positioned to do some great things here. Best of luck, and keep us updated.

Oh, and one more point. If you can prove that integration leads to dollars, you can drop the free angle. Developers are quite happy to share the wealth if your secret sauce leads to sales.

My startup has a slightly similar pitch to developers (shameless plug: http://www.famigogames.com/developer). Well, we DID have a similar pitch at one point. After many customer development discussions, we've iterated on our pitch greatly and I think you should too.

Keep in mind to whom you're marketing here: developers. The average casual developer doesn't need a ton of help when it comes to adding neat new features to their games. After all, they're developers; they can build those features themselves and probably enjoy it thoroughly.

Where they do need help is in marketing and sales, and they need more help than you realize. (Speak to several casual developers and you'll quickly realize that it's both very hard and quite expensive to compete with the major players.) For us, that meant changing our messaging from "Features! Yippee!" to "We bring you a huge new base of customers via these features, and here are metrics and stories to back that claim up!" Features for the sake of features as the value prop, when the developer is probably already losing money, didn't work well for us.

If you can adequately explain how integration leads to dollars, then your developer base will skyrocket. This part of the story is missing from your site, imho.

Firstly, this is awfully impressive. Kudos to the Kik team!

I'd love to know more here. Out of these 1,000,000 users, how many of these are actual activated users? After 15 days, what's the retention like? Where are all of these users coming from, and how does the origin of the user affect activation and retention?

One lesson that we've been learning the hard way is that it's one thing to acquire users, and it's another thing entirely to convert a new user into a long-term, engaged customer. I'd love to hear how Kik is approaching that, given their success in acquisition.