Cool idea: Y Combinator "Request for Startups" (RFS) + one of our own

Andy and I spend a good amount of time talking about startup ideas we'd like to see at Founders Co-op. Sometimes we get so excited about an idea we start it ourselves, but that's not something we can do every day.

So I was inspired the other day to hear that Y Combinator had initiated a "Request for Startups" program, where they outline a problem they'd like to see solved as an explicit invitation for prospective applicants to tackle. They've published two of these already:

• The Future of Journalism, and
• New Paths Through Product Space

Our themes tend to be a little less highfalutin' but in the spirit of the game I thought I'd publish a topic we're excited about with the same intent. If you're a Seattle-based hacker and want to take a run at this, we'd love to chat...

• Software Workflows for Personal Services

This is a general pattern, but our investment decision would be based on the specific vertical targeted with this pattern.

Professional service providers (e.g., doctors, physical therapists, career/life coaches, smoking cessation / weight loss counselors, etc.) monetize a finite resource: their time. Since the quality of their services is hard to evaluate in advance, some of these professions also have a difficult time standing out from the crowd of competing providers. And many of these professions assign tasks to their customers to be completed between sessions, as a way of both making and measuring progress.

We see *many* opportunities for an agile software development team with intimate knowledge of the workflows and needs of a particular service vertical to create software tools that:

• Increase the perceived value of the service delivered
• Support competitive differentiation and customer retention for the provider
• Improve the odds that customer goals are achieved
• Increase customer satisfaction and follow-on referrals
  

The general pattern for these software tools includes the following modules (some of which are more applicable than others to individual verticals):

• Pre-service self-assessment - a questionnaire or test that establishes a baseline for the provider and customer against which later progress will be measured.
• Session notes + prescription - a web-accessible record of each service experience, including session notes (discussion of goals and progress to date) and a prescription for tasks to be completed in preparation for the next session).
• Prescription support - a web- and mobile-accessible task list that customers would use both to review assigned tasks, and to check them off (yielding an electronic record of actions taken between service sessions).
• Push messaging - To increase between-session prescription compliance and generate incremental progress data points, generate outbound messages to the customer requesting prescribed action or real-time self-assessment.
  
• Customer + service provider dashboard - web-accessible record of all interactions, prescriptions and completed tasks, with at-a-glance visualization(s) of progress over time.
  

Economically, the goal of a service following this pattern is to shift a portion of the perceived value of the service experience away from the face-to-face interaction and toward the software-mediated experience. The expectation is that the service provider would either (a) charge a higher service rate than competing providers, justified by the incremental layer of service, or (b) offer the software service as an incremental charge on top of their standard time-for-service agreement.

Want to take a swing at this? Drop us a line...

Book Reviews: Small Giants + Nudge

I've spent more time on planes than usual lately, which means I've actually had time to read something more than my inbox, feed reader and streaming-sources-of-distraction. Two recent reads worth mentioning for this audience are:

Small Giants: Companies That Choose to Be Great Instead of Big (Bo Burlingham)

This book did nice job of articulating a number of the lessons I've taken away from my experiences working for everything from ginormous public companies (AT&T) to successful family-run ones (Patagonia) to my current role as parallel founder/funder of multiple early-stage web software startups. A few themes worth mentioning include:

"All successful businesses face enormous pressures to grow, and they come from everywhere - customers, employees, investors, suppliers - you name it. [T]hose forces will make the choice for you if you let them, in which case you will lose the opportunity to chart your own course"

• This applies especially to start-ups seeking capital and establishing their DNA around cost control and revenue-seeking. Taking too much capital too early is often toxic to the enterprise in a way that many first-time founders have a hard time seeing.

"[T]he entrepreneur is like an artist, only business is his means of expression... It's amazing. Somebody goes into a garage, has nothing but an idea, and out of the garage comes a company, a living company."

• This captures why I love my job as well as anything I've ever read. Building companies is the most exciting and complex creative outlet I've ever found, and I've deliberately geared my work life to stay as close as possible to the earliest and most creative phases of new venture formation because it's just plain fun.

Nudge: Improving Decisions About Health, Wealth and Happiness (Richard Thaler and Cass Sunstein)

This one was less fun, but still a worthwhile read - especially for anyone with an interest in public policy and how it shapes individual behavior. There's lots of familiar material in here to anyone who's read the core texts in organizational behavior or behavioral psychology, but the packaging and message add an interesting layer of ideas. Two ideas that stuck with me were:

• "Libertarian Paternalism" - this terrible-sounding name is what the authors call their brand of social enginering, and (for me) it's a convincingly better way to frame up public policy choices. The focus is on providing options (vs. mandates), and framing the option selection in such a way as to maximize the social benefit while minimizing the cost to both the individual and the state. Lots of good examples here around personal savings, health, etc.
  
  
• "Choice Architect" - this is what the authors call any individual or organization that controls what options are made available and how they're presented to the chooser. We are all choice architects in different areas of our life, and seeing our work through that lens (whether as a parent or an operator of a commercial website) is a helpful frame of reference.

I'm always looking for book ideas for my next flight, so if you have a new one you think I'd enjoy, please leave your suggestion in the comments.

Where's the *real* money in iPhone apps? Remember Web 1.0?...

Back in April I wrote up some parallels I was seeing between the current iPhone app explosion and the first big wave of mass adoption of the Web. One of the patterns I predicted at the time was a building rush of incumbent companies coming into the space:

"Brands Rush In. In the late '90s it suddenly dawned on a broad swath of incumbent brands (retailers, manufacturers, etc.) that their customers were looking for them online. To anyone in the Web application development business (as I was at the time), customers were everywhere and billing rates were whatever the market could bear. I haven't yet seen the flood of brands hit the iPhone, but early adopters are there and I'll be very surprised if the same cycle doesn't play out here."

Just a few months later, I'm seeing data to suggest that this trend is now in full swing. Every iPhone developer I talk to tells me they're getting more pings about contract development work (whether they're available for hire or not). A recent AdMob research piece fanned the flames by suggesting that 70% of iPhone owners had downloaded an app from a recognized brand, and another 60% would "definitely" or "strongly consider" downloading one from a well-known brand they liked. And Ian and I have been noticing an uptick in developer-related searches on AppStoreHQ.

To test this theory further, we just shipped a new, searchable developer directory at AppStoreHQ. Published developers can claim their profile and indicate whether they're for hire (so far almost 200 developers have raised their hand). And for folks who find that amount of choice overwhelming, we now offer a developer matching service - tell us what kind of app you need built and we'll match you with up to three qualified developers ready to bid on the project.

Is this trend for real? I'm about to find out, and will share stats as I have them. Stay tuned...

TechStars Demo Day rocks the house

I'm sitting in the Denver airport heading home (if the air travel gods allow it) from TechStars Boulder Demo Day 2009. I've been a fan of the organization since it started, not least because Brad Feld (a Judy's Book investor and board member) is a prime mover behind the project. But this was my first live Demo Day and I was blown away by the presenting companies, their founders, and the incredible mentor network that Brad and co-founder David Cohen have engaged as key participants in the experience.

Beyond the scripted presentations, the event offered a great opportunity to connect with both current and past TechStars companies, and in each of these conversations I asked the founders to describe what was the most powerful element of the program: the peer group, the coaching received during the twelve weeks, or the extended mentor network. To a man (and they *were* all men), every founder I spoke with described the mentor network as the greatest single source of value, and most expressed surprise at how accessible and supportive this group was.

Beyond David and Brad (no slouches themselves when it comes to mentorship), the TechStars mentor group includes an incredible list of household names in the software and early-stage investing world: Stewart Alsop, Jeff Clavier, Dick Costolo, Dave McClure, Rich Miner, Matt Mullenweg, Jared Polis, Fred Wilson, and on and on. And according to the TechStars
entrepreneurs I spoke with, these aren't just names on a website; they show up, dig in, give feedback and are quick to pick up the phone to make a connection within *their* extended network on behalf of the companies in the program.

As you'd expect from a solid day and a half of drinks, dinners, formal pitches and informal chats, my TechStars visit stuffed my brain with new ideas and relationships. But if I had to pick just two, my biggest takeaways from the experience are:

1. TechStars is a great and *scalable* model for early-stage venture formation. Y Combinator is a powerful brand and franchise (and in many ways the model on which TechStars is based), but it's hard to imagine it without Paul Graham at the helm. By contrast, the TechStars brand and experience is largely defined by the credibility and proven effectiveness of its mentor network. This probably makes it harder to understand and evaluate from the outside, but offers a far greater capacity to scale across geographies, industries and types of opportunities.
   
   
2. Founders Co-op can and should do more to leverage the power of its network, beginning with the involvement of our Limited Partners (or at least those that have the time and appetite for it). Andy and I have always thought of this as one of our great sources of strength, but based on my experience at TechStars it's clear that we aren't doing nearly enough to engage our own community on behalf of the companies we fund.
   

Thanks again to David and Brad for inviting me down and hosting such a great event. I already loved my job, but I'm coming away from TechStars even more fired up to make the Founders Co-op offering as differentiated and effective a member of the Seattle startup community as TechStars is in Boulder.