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What hackers don’t know about business (filepicker.io)
122 points by tagx on Aug 7, 2012 | hide | past | web | favorite | 50 comments

Maybe somebody can translate the last paragraph into English for me. I read the preceding paragraph several times and I'm coming up empty:

  Based on our experiences at Filepicker.io we learned that 
  it is important to delineate the differences when
  planning initiatives that drive growth, the amount of
  resources needed and the profile of team members required
  to drive the initiatives.
While we're going for pompous titles, how about "What newly minted MBAs don't know about writing"?

Translation: You need to figure out which demographic your business is targeting (large business, small business, consumers) and plan your marketing/sales according to that and have the correct people on your team depending on what your marketing/sales plan is.

I agree that it isn't very well worded but it does make sense.

Sorry, I agree probably not the best-written paragraph.


* There are distinct focus-areas on the business side, just as there are on the coding side

* Identifying the differences helps us figure out what to do, when, and how

"Understand the differences between these things, and don't mash them all together. They each have unique requirements."

Very true. As startups with limited time and resources I tend to stick everything into the "lets figure out how to grow-lets do blogs, sell to larger customers, plan distribution hacks etc." It is important to decompose the business bucket and pick things that matter to my specific kind of business.

Marketing is about getting the word out. Think about ads and blog posts.

That just sounds like advertising & PR. There is a lot more to marketing. To crib the definition from Wikipedia (which sounds pretty close to the one I learned):

  Marketing is "the activity, set of institutions, and 
  processes for creating, communicating, delivering, and 
  exchanging offerings that have value for customers, 
  clients, partners, and society at large."[1]
From the same page, another way of looking at it is:

  Marketing is used to identify the customer, satisfy the 
  customer, and keep the customer.
"Getting the word out" is important, yes, but that's not all there is to marketing.

[1]: http://en.wikipedia.org/wiki/Marketing

Getting the word out is only a fraction of what marketing actually is. Marketing involves:

- defining who your customer is (demographics, income, etc.)

- gathering feedback from the customer through surveys

- using that information to iterate on products/launch new products that solve your customers pain points (if half your customers are left handed this will tell you that you need to design your product for left handed people as well)

- packaging and designing how your product will look on the shelves

- defining price points based on the data you gathered from your surveys

Not to be a jerk but it sounds like the author of this post hasn't even taken a Marketing 101 course if he's defining marketing as writing blog posts...

So traditional marketing 101 is geared towards larger companies with lesser operating uncertainity and more resources.

As a startup, the key question that helps prioritize between everything you mentioned is "what activities are hygiene activities, versus what are growth enhancers?". Defining your customer, gathering feedback, iterating on product and packaging all fall under hygiene activities. Meaning-if you dont get them right they will hurt your ability to grow. Pricing the product right and the rest of biz dev, marketing and sales activities are focused on enhancing growth. In a startup, the center of gravity for the hygiene activity is the product team (of course this depends on the type of startups). Thus, the job of the non product folks is getting the product found and getting folks to use the product.

This isn't just geared towards larger companies with more predictable business models. It's good business no matter what size company you are. Even startups use these marketing techniques. And I'd argue that in a startup, everyone on the team is a product guy.

define your customer: use analytics to find out where your visitors are coming from. Is your audience just English speaking or should you internationalize your site? What income brackets is your web app designed to cater to? Lower end 99 cent app? Higher end quality software?

Gathering feedback: Startups can easily email their customers surveys and ask for feedback

Iterate: When you talk to your customers, ask them what they like and don't like about your app. Iterate based on their suggestions

Packaging: Landing page. Having good copy and a strong selling page. Simple sign up flow and an on-boarding plan to help them get started and using your app

Price points: Use surveys and the customer "persona" you defined above to break up your customers into different price brackets and sell them features based off what they want and what they can afford.

As a hacker, I've never taken a marketing class (or even a business class) and this all just seems like common sense to me. Pardon my arrogance, but it does seem to me like we hackers/coders are inherently better equipped for branching out into other areas of business than MBAs are at branching out into technical areas. That's not to say there aren't a high number of MBAs who can hack; it's just that a hacker's ability to quickly recognize patterns and manipulate systems to their will makes it a bit easier, whether it's code or the flow of information/relationships between people required for business/marketing.

I've found that there are generally two definitions of what "marketing" really entails:

1. Generate brand awareness, get people interested in your product and bring in leads/customers (depending whether you're B2B of B2C)

2. One that includes all that, plus the market research necessary to figure out how to do all that stuff

For lots of startups, the second part is really part of the entire product/customer development cycle, where product managers figure out what the customers need and how to talk about it in their language. This leaves the "marketing" people to really just focus on the more narrow definition. But in more traditional businesses, lots of that market research falls under the label of "marketing."

As a guide for hackers, the most important two marketing activites are "getting the word out" and optimizing your funnel from visitor to lead to customer.

I can't resist referencing here: http://en.wikipedia.org/wiki/Outline_of_marketing#General_ma...

There is so much more what falls under the label marketing. From Pricing, Distribution all the way to Data Analysis. I really like the definition posted by mindcrime/AMA's.

Agree that marketing is not just about getting the word out. But the hard thing about the definition you quoted is that it doesn't lend itself to focus. Its too all emcompassing and things like "satisfy the customer" could include awesome product development and customer support.

Well, that is probably core to marketing. It is not just an isolated instance but only if all parts are up to par it can make its optimum effect. A shitty product and a shitty customer support will (almost) always sabotage a brand to such a degree that even the most wonderful ads won't help. Even if it succeeds in the short term, somebody else who is taking a more holistic approach should be able to gain significantly on marketshare.

Totally agree! NO amount of marketing, sales, business development can overcome a bad product or sub par customer support. A wholistic approach will always win over a piecemeal approach but in a resource constrained environment, we are better off picking the one or two things that give us the best bang for the buck. The "programmatic" way of running marketing isn't optimal for small startups

School of Henry Ford Advertising: Model T for less than a $1000 Marketing: If I can figure out how to make a car for less than $1000 I'll sell millions

PR is different from Marketing; PR, as I understand it, is meant for when people already know who you are and Marketing is meant for when people don't. In early stages, this is basically indistinguishable, so Marketing handles it.

Under a section labelled "Not understanding the differences", too.

I think the name "Filepicker.io" is severely limiting. When I hear "Filepicker.io", I think "easy-to-use library for handling user file uploads." That is rather narrower than their description of the service on their blog: "Filepicker.io helps developers connect to their users' content."

Don't get me wrong, I very much enjoy the Filepicker.io blog. I have never used their product, but from their website, API docs, and blog they seem like a well-run startup with a value-adding service.

Nonetheless, they are hurting themselves with such a specific name. It creates the negative perception of "Feature, Not A Company" that Mark Suster talked about on his blog: http://www.bothsidesofthetable.com/2011/08/22/fnac-feature-n...

We've realized that now and are in the process of changing our name. I'd love to chat with you about what you think of some of our ideas

I'm not your customer (because I prefer own root servers over cloud services, and even prefer housing over hosting) - but I think you might stick with your name, because:

1. its a known (brand) name 2. it tells where your product is strong

But I suggest to change the Enterprise pricing tag:

1. Don't tell a price for enterprise. Enterprise customers have a high COCA, so price is always negotiation. 2. Offer enterprise features = Your services runs at their servers, under their control, not as a SaaS, but as a normal enterprise software that comes with installation support, consulting, ...

Thanks for the suggestions. It's a delicate balance between appearing "complete" with the offering versus leaving headroom for customization for larger customers. Increasingly with the consumerization of the enterprise do you think that custom development, consulting etc are a must have to servicing an enterprise?

Usually. My group isn't IT, so with almost every purchase we ask for customization. (IT gets custom stuff too, but they also buy a lot more off-the-shelf stuff.) We have disqualified vendors for not being able to customize their product fast enough or well enough. We pay (a lot) for this. While we could write the code ourselves for a lot of these customizations, the vendor can do it faster and it's easier for us to buy the software than increase our headcount to do the work.

You'd be amazed at how much an enterprise is willing to pay for software, if you have the right niche and are going to make life easier for a bunch of people.

> ...many in the software community don’t understand the differences between Marketing, Distribution, Sales, or Business Development.

Many in the 'business community' don't understand the differences as well. Not being an ass or making assumptions - I'm speaking from first hand experience here.

a complexity theory error: "Just as you can reduce all NP hard problems to 3-SAT..."

you can reduce all NP problems to 3-SAT because 3-SAT is NP complete. you cannot reduce all NP hard problems to 3-SAT. for example, all problems in NP reduce to SUCCINCT-SAT, an NEXP-complete (and therefore NP-hard) set. good luck reducing SUCCINCT-SAT to 3-SAT (despite how little progress in separation of classes we've made, the time hierarchy theorem still indicates this is impossible)

great response! NP-problem discussions make me happy. for those not understanding a word: http://en.wikipedia.org/wiki/Boolean_satisfiability_problem#...

I'll tell you what, I'd much rather be working amongst a team of engineers who are learning to run a business than a team of MBA types who are learning the ins and outs of software development. I'd put my money on a team of engineers every time too. But I also steer clear of anyone who describes themself as a "hacker". Code is a craft, MacGuyvering something together is no way to build a sustainable business.

And I'd put my money on a team of good people that doesn't involve members who are willing to type-cast a person based on his or her degree.

Didn't say anything about degrees. Ultimately it's about people who know how to make things vs people who know how to talk about things. More often than not, in the software world that equates to engineers vs MBAs. I'd much rather work with people who can make and need to learn how to talk than people who know how to talk and need to learn how to make

The easiest way to grasp the difference is to think of the Attention-Interest-Desire-Action paradigm.

This link has a basic primer http://en.wikipedia.org/wiki/AIDA_(marketing)

Theoretically (and likely), this could be applied to anything that involves convincing: politics, debate, etc., of course with different media of action e.g. voting. This is basically all you need to know about marketing, the science of interest.

So this is what business people mean when they say programmers need to understand business?

Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense.

But now we know.

So, when will business people understand software development?

So this is what business people mean when they say programmers need to understand business?

No. This is the thinnest sliver of a fraction of what business people think hackers should know about business. See the link above to the "outline of marketing," for example. Just marketing is a huge discipline with a very large body of knowledge... add in distribution, support, finance, business development, sales, etc., and there's a whole world of knowledge that a lot of programmers don't generally have.

Apart from not knowing the exact nomenclature, it's embarrassing if programmers don't know these things. It's pretty much common sense.

Sure, at the 60,000 foot level. But the devil is in the details.

Seriously, as popular as it is for hackers to mock "business people" and MBAs and business school, do you really think that business school doesn't exist for a reason? You think these guys just sit around and spew bullshit at each other all day, graduate, then go on to run successful, real-world businesses?

Business, especially at scale, is fracking complicated. And a successful technology company can't be all about just technology OR just "the business." You really need a holistic approach (which means somebody, or multiple somebodies have to understand the big picture) where technology and the "business side" complement each other.

So, when will business people understand software development?

Ya know, it would almost be fair for the business people to ask "when will software developers understand software development?" We, as a group, still don't do a good job of giving good estimates and delivering things that work reliably without constant hand-holding and patching. But, to be fair, that's often back to ill-defined requirements and unreasonable schedule pressure, which still - IMO - argues for the need for a holistic understanding of what's going on - that is, a shared understanding that's common to the "business people" and the hackers.

In fact, I almost wish we could get away from making the distinction "business people" and "technology people" (or "hackers") and drop the antagonistic, adversarial atmosphere that often seems to exist.

> This is the thinnest sliver of a fraction of what business people think hackers should know about business.

This sounds like programmers need to know a lot about business. Of course knowledge is a light burden and all that, but do really programmers need to know that much outside their area of expertise? Isn't a shallow understanding enough? Otherwise, what would you need dedicated business people for?

> Ya know, it would almost be fair for the business people to ask "when will software developers understand software development?"

Good point! But then again, software development is difficult. It is hard if not impossible to estimate the schedule and cost of creating something that nobody has ever done before. And perhaps that is what the business folks need to understand. The tricky thing as a developer is explaining this without sounding like you're coming up with excuses for being late.

This sounds like programmers need to know a lot about business. Of course knowledge is a light burden and all that, but do really programmers need to know that much outside their area of expertise? Isn't a shallow understanding enough? Otherwise, what would you need dedicated business people for?

Sorry, my reply was coming from the point of view of "hacker as potential entrepreneur", not "hacker as employee of $FIRM." Yeah, if you're writing code for an existing business, just doing normal "business as usual" stuff, then you wouldn't need to know as much about the details of the business. I would think you'd still be better off with some knowledge of the "business side" of things though.

OK, then I understand your position better. This is hacker news after all.

BTW, I think that there's misunderstanding between software developers and business people because software development is not as much about technology and hard facts as non-developers tend to think. It is very much about organization, people and processes. So in that way, software development is more similar to business than business people expect.

Most hackers I know understand all this, but minus the fancy business school acronyms.

I would say there are many that don't ( I was in this pool until very recently). This is especially true of selling to big companies. Hand holding, dealing with RFPs, getting through to the right person inside to support you and getting involved in internal politics are mind-bogglingly frustrating and often not built on logic or rationality so it often doesn't make any sense at all to hackers.

I couldn't get past this sentence: "If it costs you more to get a customer then you can possible make from them, your business is going to fail."

Seriously learn some English man.

The worst part about this is you're arguing that programmers should learn business directly after stating that you argue about business managers not needing to learn programming... Seriously where is your logic sir?

Maybe you can write an article about why you think business managers do not need to learn programming (something I would agree with as a programmer), and make sure you have it edited before posting.

Doesn't LTV stand for "[customer] life time value," i.e. the amount of money you'll be able to generate from a customer during his/her time with your business, and not "long term value"?

I picked up on that as well. Wikipedia seems to agree with us: http://en.wikipedia.org/wiki/Lifetime_value

I agree with their points, but overall the article is just a little bit "off". Maybe it's the bit about the integral. If you had a customer pay you $1 every month, and they on average stayed for one month, your LTV is $1, not the integral of 1*x (1/2).

I've always seen customer lifetime value abbreviated as CLV. That being said, I've never heard of 'long term value', and I think the author is mistaking this term for CLV.

Customer lifetime value is something calculable, even if crudely -- its amortized revenue per customer as retention approaches zero. "Long term value" is more of a concept.

It really depends who you talk to. At Groupon EU, Japan, Korea and USA we called customer life time value "LTV".

Also, Avinash Kaushik, author of one of the best books on Web Analytic and previous Google Evangelist, uses LTV as well.


Typo. Thanks.

when marketing Filepicker to enterprise users, how successful was referrals/friends/valley connections vs coldcalling, percentage-wise?

Part of wisdom is knowing that the typical hacker and the typical customer are alien species, who cannot speak each other's language.

No they aren't. I wish people would quit perpetuating such nonsense. Promoting this belief just makes the problem that much worse and adds to the adversarial / antagonistic relationship between hackers and the rest of the firm (and the customers).

And the death of the word 'hacker' continues...

Very true.

This is why some schools are taking new approaches to integrating business and computer science curriculum. Their graduates leave understanding business basics, have worked in teams and even for clients on contracted projects.

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