ailon's DevBlog: Development related stuff in my life

Newsflash: You can’t track everything

1/17/2012 8:28:32 PM

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Photo by Konstantinos Papakonstantinou

Back in the pre-internet days advertisers could hardly track anything and they had to calculate RoI on their offline ad campaigns based on some assumptions, approximations or secondary data. They were aware that their data wasn’t accurate so they understood that all of their conclusions based on the scarce data aren’t facts, but just their best educated guesses.

These days on the internet we have referrers, cookies and other stuff that lets us track the whole path of our users from our ad somewhere, to their first visit, to the purchase of our product. Sure, quite often we can see that customer A came from site B, looked through our site, returned to it in a few days and made a purchase. Hooray!

Based on this data we start to believe that we can track everything and now we can measure RoI of our campaigns by simply comparing money we’ve spent on it and amount it generated in sales based on data provided by our tracking/analytics software. This type of measuring success is prevalent in blogs, podcasts and books on entrepreneurship these days and we are used to looking at it as the absolute truth. Because we have the data to prove it!

Unfortunately we can only track something and not everything.

Let me give you a couple of examples.

We are tracking the sales funnels for amCharts. We get pretty good data for quite a large portion of sales and can tell where they have originated. That said the most popular source of sales is Google search for “amcharts”. Yes, “amcharts”. Not just “charts” or any other generic term, but our exact name. This means that the majority of sales come from people who already knew something about amCharts. This could be someone who has heard about amCharts from a friend. Or someone who has clicked on our ad while doing chart library research at home on his iPad and then came back via Google search from his computer at work the next day. Or a CEO (or some other guy with a credit card) who has been told by his developer to buy amCharts. All of these sales could have initially originated from a campaign that could’ve been declared a complete waste of money based on the tracking data we have.

Another example with a different angle. One of the best music albums I’ve bought last year was Velociraptor! by Kasabian. Let me try to track the chain of events that led me to the purchase. I’ve heard about the band and some of their songs before, but have never bought any of their music. The catalyst of the purchase was a remix of the song “Days Are Forgotten” by DJ Z-trip. I’ve heard it on Z-Trip’s site, then went to the Zune store on my PC a couple of days or even months later and bought the album. I’m pretty sure there’s no trace of this chain anywhere. So Kasabian’s record label (or whoever cares) has no idea that money spent on commissioning Z-Trip and LL Cool J to do the remix resulted in the sale. But lets go deeper. Why did I go to Z-Trip’s site in the first place? Because he was DJing at the party of MIX11 conference I’ve attended last year. So I guess part of the referral credits should go to Microsoft? But why did I pay attention to the name of the DJ at MIX11 and have no idea who was DJing at MIX10? Because I already knew who Z-Trip was, even though I’ve completely forgotten by that time. Back in the early 2000s I’ve listened to Linkin Park a lot and their lead-vocalist did vocals on one of the songs on Z-Trip’s album. And I don’t know who was responsible for turning me onto Linkin Park.

As you can see human mind can trace some events back along a chain of events that none of the tracking software can pick up. In the above mentioned case it even failed at the very first step which would definitely be of interest for a music bands management.

The bottom line is that the fact that we can track something gives us an illusion that we can track everything, but the next couple of times when you buy something online try to analyze if the seller of the product can trace your purchase back to the original source of your interest in this product. And when you notice that they can’t, think about your own campaigns and how you believe you know the RoI on them.

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My Startup Series: How I Built and Sold almost-Digg 5 Years Before Digg

1/10/2012 8:26:59 PM

After my first startup was killed by the evil IP thieves I’ve lost faith in entrepreneurship… I’m just kidding. I was just finishing school, then university, then getting married, then getting my first “real job” at a bank, etc.

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Photo by Joe Shlabotnik

The Meeting

By 1999 I worked at a small company (with a big name). There was huge financial crisis in Russia and our CEO had lots of bets on several projects that fell through due to the events in the eastern neighbor. So the salary was always a couple of months behind. But we were expecting our daughter, therefore switching jobs wasn’t on my radar at the time. So I set up on a mission to find some side work.

I’ve responded to an ad of a local company looking for freelancers to work on some web project for some US company. I’ve been offered the job as was one other guy. We’ve met to discuss that project for a couple of times (I’m not even sure I remember what it was) and then were told that the project fell through and our services were no longer needed. Little did I know that I will end up working with the dude till this day.

So we were out of our freelancing gig, without anything to replace it with, but still willing to do something.

The most popular site on the internet at the time was Yahoo! (I think). And it wasn’t the huge behemoth it is now. It was mostly a manually managed directory of web sites on the internet. Yeah, it was actually possible to manually manage a list of all the meaningful sites on the internet at that time. I could have navigated to a category of interest and see all the sites about, say, web development.

That was great, but how do I know when one of these sites posts new content? Believe it or not there were no RSS readers (or RSS feeds for that matter) and stuff like that at the time. So the only way to know when there is a new article on 4 Guys from Rolla – a hugely popular ASP developer site of the time – was to actually visit the site.

AC not DC

So my idea was to create a directory of content for web developers. Or as we called it “The Content Directory for Web Professionals”. I’ve pitched the idea to Martynas after he promised not to screw me over and implement it without me. Classic first time entrepreneur move. Fortunately he thought it was a good idea too and turned out to be a cool guy in general.

We have started working on the project. Martynas did the public part of the site and I did the administrative part. It’s funny that even in 1999, coming up with a decent .com domain name that was not taken, wasn’t easy. After a lot of deliberations and domain name checks we’ve settled on ArticleCentral.com.

On some day in 1999 ArticleCentral went live.

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For the next several years we were doing daily rounds around the sites in our database and [selectively] list new articles. Users would come to ArticleCentral, check the new articles, suggest other articles and rate them (sounds familiar?). It was possible to filter articles by category and rating, search through our article database. We even had a “tracker” – a piece of JavaScript that you could embed into your own site and show newest content from ArticleCentral. I totally forgot about that and, frankly, was shocked when I remembered that we had that in 1999 :) One may argue that the web didn’t come a long way since then.

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Later on we’ve added a sister site for hardware articles and reviews.

We had several mailing lists sending out thematic updates to thousands of web developers and designers. We were writing editorials for our weekly newsletters and we had a weekly poll. After several years coming up with editorials and poll ideas became a real chore. Fortunately later in the life of the project we were approached by a young guy (I think he was still in high school at the time) who was willing to write the editorials and think of new poll ideas and we happily delegated these to him. After ArticleCentral he got “promoted” to HotScripts where he still blogs regularly.

We’ve sold quite some advertising on our site and in the mailing lists at rates that would make any modern content publisher salivate. Unfortunately traffic at the time was a joke looking from 2012, so great rates didn’t materialize into nice red Ferraris and beach houses.

The Exit

Anyway, by 2001-2002 the dotcom era was long over. We were pretty bored with the project and it was too early (on the internet scale) for us to come up with something that would transform AC into what later materialized as Digg. We decided that it was time to make an EXIT. Even though we didn’t know the term at the time. So we have just published a splash page on the site that it was for sale.

This was a long shot, but we were contacted by a couple of parties and, while I was on vacation in Turkey in September of 2002, closed the deal. I doubt that I’m allowed to disclose the amount of the deal, but lets just say that it paid for the vacation and I still had some change left.

This concludes a story of how I became a serial entrepreneur with one successful exit. (Haha. Sounds cool when I put it this way). But I have a couple more startup stories up my sleeve.

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My Startup Series: How Intellectual Property Theft Killed My First Startup

1/6/2012 6:28:06 PM

I got my first computer when I was about 13-14. It was a Sinclair ZX Spectrum Plus. I had it hooked up to a black and white TV that was probably smaller than my current phone. Well, maybe not the phone but probably smaller than my Kindle. And you had to load software from cassette tapes.

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My first computer. Photo from Planet Sinclair.

USSR was living its final years but it still was USSR. There was no way to buy legal games or applications for the computer. To get some games you had to go to some basement and buy a service of recording pirated games to your own cassette (getting cassettes wasn’t a small feat either, but that’s another story). Another option was to copy games from friends or a “pusher” – someone who didn’t own a basement, but was selling pirated games anyway.

A friend of mine knew such a pusher. But at the time parents bought me my ZX Spectrum the guy was away and I couldn’t get any games. All I had was a computer manual. Funny thing is that computers of the time had programming tutorials right in their manuals. So out of boredom I taught myself some basic BASIC. This has probably defined all my life and the fact that I basically don’t play games.

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Scan of the Sinclair ZX Spectrum Plus Manual page from Retronaut.

Anyway, the pusher came back and delivered some games and I played them, but I was already hooked on programming.

After some small scale projects I set out to make a game. At that time the most popular TV show in USSR was a “Wheel of fortune” rip-off called “Поле чудес” (The Field of Wonders). So it was only natural that I wanted to make a computer game for that. I don’t recall how much time I’ve spent on it, but after some time it was ready and I’ve hosted a game with my parents and their friends. One of my father’s childhood friends was a programmer and he complemented me on the game, so I thought I was an awesome developer. I’ve shown the game to my “pusher” and he complemented me on it too. He even asked me to record a copy for him, so he can play at home.

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I was young, I was born in USSR and I had no entrepreneurial aspirations at the time. I just made some product and was happy when people told me it was cool.

One day I went to a “basement software store”. There were printed catalogs of all the pirated games and applications you can get recorded on your cassettes. I’ve noticed The Field of Wonders on the list made by someone else and was excited to see what other programmers did and how does my game stack up against theirs. So I paid the guys to record me that game among others and went home.

When I loaded the game, my jaw dropped. It was my own game with all the copyrights and logos replaced with some other logos. When my friend came over he recognized the name of the “company” as the one our “pusher” used. The guy just took my game “rebranded” it and made some money. I’m pretty sure he didn’t make anything worth mentioning, but I didn’t make anything at all. I’ve actually lost a few cents by paying those basement pirates for my own game! So I was pretty upset, but I didn’t care much. I was even proud that my software was good enough for someone to steal and rebrand. I didn’t buy games from that pusher anymore, though.

That’s the story of my first startup and one of the milestones letting me pretend to be a serial entrepreneur. I’ll blog about my later endeavors in future posts.

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