Sunday, November 4, 2012

Main Keynote: Drew Houston

Amazing insight into being a startup, breaking through and meeting Steve Jobs...

That's our final speaker for today!

Thank you to everyone who participated, helped out and attended this years Cyberposium!

The Impact of Big Data

Ali Riaz, Attivio
Ari Gesher, Palantir
Fred Shilmover, InsightSquared
Colin Hill,GNS Healthcare
Sam Bisbee, Cloudant
Kent Bennett Bessemer Venture Partners (moderator)

Probably the biggest audience for a non-keynote talk today!

Great panelists from all sides of big (and small but very messy) data - healthcare, military, retail, internal productivity and HR.

Turning the huge streams of data captured by new technology into useful information for making decisions or understanding complex systems (from pleasing customers to treating diseases).

Social Media in the Enterprise

Thanks to:
An Le, Yammer
Steve Garrity, Hearsay Social
Daniel Freeman, Atlassian
Michael Scissons, Syncapse
Tom Davenport (moderator)

Employees will find a way to use the tools they need to do their job - despite internal company rules.

Coordination of social networks and enterprise tools is already happening, but most companies find they are still using multiple systems to communicate or find information.

Mobile allows real time feedback from and to customers but also problem solving on the go (such as code checking in a bar with your team).

Companies' culture really decides how internal social networks are used - some management will welcome open discussion and criticism while some react badly...

Mid-Day Keynote: Lee Hower

Great talk by Lee in Burden Auditorium - which is packed!

PayPal, LinkedIn and co-founding tech companies.
Could you be part of the next Paypal Mafia or Traitorous 8?

Thanks to those who voted for Q&A questions using Pigeonhole

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Enjoy the conference everyone!

Subscription Business Models: Evolution or Fad?

Subscription Business Models: Evolution or Fad?
We will debate the merits and flaws of the increasing proliferation of companies (not just cloud software+services) adopting a subscription-business model (i.e. subscriptions, usage, metering, etc.). For example, what consumer behaviors are driving this change? Or is the drive coming more from the investor community rewarding recurring business models with higher valuations? What are the challenges with this type of business model, specifically for each of the panelists and how it impacts their future strategy.

Paul Maeder, General Partner, Highland Capital Partners

Daniel Freeman, VP or Product Marketing, Atlassian
Hope Neiman, Chief Marketing Officer, EMN8
Shawn Puddester, Director, Polycom
Sam Clemens, InsightSquared
Brent Chudoba, VP, SurveyMonkey

Q. You work for VC companies, which means you have a high cost of capital. A lot of people have a lower cost of capital than you do. Why rent instead of selling?
  • VCs value the monthly recurring revenue stream than getting cash upfront and capturing a percentage of the LTV. If I have 30 days or a year to sell them more products and services because they are a subscriber, we can get more value.
  • The predictability is good.
  • There is an alignment between the pricing system and the type of thing you're building. 
  • We price for market share. 
  • With competition in market place with open source technologies, etc., our goal is to have massive adoption. This allows us to have
  • Upsell is really the magic on the consumer side. What are we acquiring a customer for? We have extremely robust models for that. Our cost for acquisition has to be less than half the cost of the lifetime value of the customer.
Q. Churn is the ugly underbelly of subscription business models. What are the dynamics of churn and how it changes over time?
  • We segment churn of those who are active vs. those who are passive.
  • At my prior two companies, less than a 10% churn rate for active customers. I don't know very many less than 5%
  • There is a natural floor for churn, like the natural unemployment rate
  • Another thing is how do we calculate LTV? If you have a 5% churn rate for each month. So your customers are lasting for 20 months (1 month divided by 5%). So that means that your customers last for 20 months. If your subscription is $1000, then your LTV is $20,000.
  • What happens if a customer comes back? They quit in 1 month, but come back in month 4. If you hold the data, that can be really valuable.
Q. When is a freemium model appropriate?
  • SurveyMonkey: When you have a fairly low-priced service, it's a good way to let people test your product. Whether that's a free trial or freemium depends. But we are most successful in pockets like nonprofits and small firms, where they may not want to get a budget for a subscription until they know it works. So freemium allows them to do some things, but if they want to export data or add more questions, they need to move to the paid model.
  • Beach Body: We tried to get people to engage with a friend
  • I like free trial, but I'm not a fan of freemium for startups. It's too easy to build something that people can use but not pay for. So go build something that people are willing to write you a check for.
  • Freemium can be a cop out. Business doesn't start until you get paid for it.
Q. After I've subscribed to your product for 5, 8, 10 years, should I get a Buy It Now option so I can buy the license for life?
  •  It's hard because we can shift new stuff and change prices and change currencies. We may want to reserve the right to have price increases. We may also want to change the subscription itself, such as moving from a monthly to a 3-month subscription.
Q. CPA - cost per acquisition. Can you talk between relationship between LTV and CPA?
  • If you're running a subscription model, cost acquisition per customer divided by lifetime value is the most important ration. If CAC / LTV < 1, you probably don't have a value.
  • In consumer it's a bit different, because you can grow the LTV because you have a lot more products you can upsell.
Audience Questions

Q. For consumer companies, where you've already had a basic business model, what is the incentive to switch to subscription?

Shoedazzle actually got rid of the subscription model. At Little Black Bag, lots of new and trial items. At Rent The Runway, looking to do partnerships that become a secondary cash flow basis that is on the subscription model. Otherwise, you get a problem like Gilt and Rue La La where it gets tiring and people are sick of opening your email.

Q. What about customer support policies?
  • In a consumer business, you have to have free returns today. In reality, people don't generally cash in as often as you think. At Beach Body, there was a less than 2% return rate.
  • Just give people their money back. If it's $20 or $100, it's not worth upsetting them and having the customer yell on Twitter. Give it back, and give it back fast.
Q. Does too low a churn mean you're not charging enough for your product? Are you leaving money on the table?
  •  Sure, but we don't want to upset our original user base.
Thanks panelists for coming out today!

Hardware & User Interface Design

Ian Bernstein,Orbotix
Matt Rodgers, Nest
Mariah Levitt, Continuum
Micah Yairi, Tactus Technology
Michael Grinich, MIT Startup Bootcamp (moderator)

Hardware poses some serious design development issues not usually associated with tech - how to prototype, get consumer feedback and iterate?

Combining physical design with user interface - create an open API to be truly adaptable and exciting!

The panel says haptic displays and texture feedback may be big in the future but simplicity and user-focus should be the number one priority.

Why are user interfaces of design tools so frustrating and unintuitive - market size and development time but could B-school students help?

First Panels: Future of Music

Huge thanks to:
Gary Liu, Spotify
Elias Roman, Songza
John Petrocelli, Bulldog Digital
Alex Luke, EMI Music
Steven Scheider (moderator)

A great turnout for an important subject - streaming, live, subscription...

20th most popular soundtrack to make love to in U.K.: Star Wars! Thanks Gary from Spotify

Mobile Advertising Panel

Welcome to Mobile Advertising!

This panel will focus on how advertising is shifting to mobile and the effect on marketers, ad networks, publishers and users. How does mobile affect advertising strategies and associated ROIs for marketers? What is happening in performance based marketing?

Michael Wolf, Activate

Kiwi Inc., Google, Jumptap, Mr. Youth

Summary: Q&A style between moderator and panelists. 

Q. Introductory question
  •  Trend in social is that the story is becoming the ad unit. People want increased relevancy in what the content is.
  • Advertising is playing a clear role in fueling what services people are consuming now. When you look at metrics like click through rates, brand impact studies, and so on and so forth, mobile is 2-6X more effective than PC and online equivalents. The lack of pixels is more advantageous because you have more share of voice - on a PC, you can have a lot of different ads and browsers. On mobile, you really can only have one ad at a time.
  • It's crazy to think that mobile is the most personal device we have, but we have the worst ad experience on it. 
  • When I talk to my team, I ask them where are people are. Where are the gamers? Where are the consumers we want? We don't want to invade every mobile phone, just the ones that we want.
Q. 60% of mobile advertising is from search. Where are the other forms of content is mobile advertising going to accompany. 
  • Text formats are the easiest to execute. All advertising at the end of the day is information.
  • From Google's perspective, we want to be sensitive to privacy. We treat privacy very seriously. 
  • In the long-term, it's the point that your phone is the single-point of access for a single user. For PC and tablets, you could be sharing this. But people in the household have their own phones, and so there's less noise, better data, and better targeting.
Q. Let's talk about social. How do you see social playing out in terms of social advertising.
  •  What's the KPI that brands are looking at? For social, it's always been about engagement. And for engagement, it's been the amount of positive feeling. However, it's not immediate. People can love a brand, but that doesn't mean they are going to go out and buy it right away. Being a traffic driver doesn't incite an action that's going to tie back to a KPI.
  • Ad buying can take place from CMS software that manages community conversations across Facebook, Twitter, etc.
  • If you spent 2% on social and 1%  on mobile, an ad agency isn't going to tell you how to optimize those channels. They're worried about the other 97% of spend that is above the line.
  • A lot of gamers on facebook create fake accounts so the don't spam their friends with FarmVille requests. So we have to almost create our own gaming environment because of this dynamic.
  • With social, ads become an experience. The more packaging you do, the more incentive users have to share it. Why not have an ad go viral?"
Q. Last year's big words were "big data". For next year, it'll probably be "ad tech". What do you see?
  • Windows 8 is probably the new direction. Maybe they are too early, but I think that's where the industry is going to go.
  • The ecosystem is changing so fast. Every year, there is a new phone. The industry is continuously changing.
  • A problem with HTML 5 is adoption rates. Luckily with Android there is a fast release cycle.
  • You have advertisers who may get bidded out of fixed inventory. 
Audience Questions

Q. When you talk about data and cookies, you've been talking about front-end. In my experience, it's been connecting the front-end to the back-end. Is that an issue? If so, what do you think is the solution?
  • You're right - the issue is in the availability of inventory. On Apple's platform, for example, it accepts first-party cookies before third-party cookies.
  • People are moving onto IFDA which is an identifier for ads. Users will be able to turn off of tracking for specific identifiers.
  • Cloud is changing this like iCloud which recognizes that you have multiples devices.
  • Infrastructure is being built around this to fix it.
  • Anonymous ID will happen at some point, and float through the ecosystem. I think this issue will get solved pretty soon.
  • From an analytics perspective, we are changing the way tracking is done and working with clients to get digital CRM and conversation tracking. This starts with device level or channel level. It's starting.
Q. Do you think there will be a premium for mobile advertising?
  •  It's getting cheaper and cheaper because there are so many other options. A big player like will be able to sell 10% of their inventory, but then they have to get other things done.
  • DataLogics and Targus provides closed-loop analytics...those kinds of analytics is coming to mobile.
  • There is much more supply than demand for mobile ads. Where you may be able to see a premium is in silos of inventory like rich media and attaching third party data.
Thanks panelists for coming to today's panel!

First Panels: Mobile Advertising

The mobile advertising panel is happening now:
Mihael Mikek, Celtra
Vishal Sapra, Mr.Youth
Jorey Ramer, Jumptap
Wook Jin Chung, Google
Jean-Paul Sanday, Kiwi Inc
Michael Wolf, Activate (Moderator)

Your most personal device - with you 24/7 but how can brands really make their ads relevant, engaging and a step forward from existing online?
(Geo location the next big thing or over-rated?)

Alexa Hirschfeld, CEO of Paperless Post

Welcome Alexa Hirschfeld, CEO of Paperless Post back to Harvard! Alexa graduated from Harvard College in 2006 and has since co-founded the leading online stationary company.

Starting Out
  • When you're starting out, it's hard to tell what you should be spending your time. Example: large internal debate on whether or not to spend development time on envelope liners. Initial thought was: that's the last thing we should be spending our time on. But people cared about whether their magenta liner would match their periwinkle card. People cared. So what started as a seemingly silly internal debate really changed the direction, because the introduction of liners created explosive growth in revenue. From there, we understand that people are willing to pay for customization.
  • Was told by a prominent business person that "people won't pay for pretty .jpegs". He was wrong: people will pay. (And, they were .pngs!)
  • People were really negative about wanting to go B2C instead of B2B. We raised our initial round thinking we were going to be more B2B and reach organizations who were planning events. We thought we would be an Eventbrite model where 501(c)3's would use our product for fundraising and we would take a cut of purchase. But then we saw explosive growth on the consumer side, and the consumer side ended up requiring more scalable. But then the question is how to get consumers to pay? The answer was charging people based on customization, and creating a freemium model if people don't want to pay.
Huge Network Effects
  • It's about the guests, stupid. Only 30% of people RSVP, but 60% of people see the Guest List. 
  • Upon receiving the 3rd card, a 225% increase in registration. After the first card, they say, "this is neat." After the second card, they say "this is just like someone else's card." After the third card, they say, "I guess this is what we're doing now.
  • We did a test on social functionality. If you login, you can see the guest list. Registration numbers went through the roof because people wanted to register to see the guest list. Doubled receiver conversion rate in a couple of weeks. Social features for receivers. Private messaging for hosts and guests. Next up: guests can have conversations with each other. Social features created a hockey stick effect in weekly user growth.
New Products
  • It's hard to tell what users want. When you survey people, users want everything: wine tags, gift tags, menus, tote bags, etc.
  • New product: Paper by Paperless Post. Hard for something named "paperless" to actually be selling a hard paper product.
Additional Thoughts:
  • You have more than 1 customer: senders and receivers. Senders are a tiny sliver of the total population of people who interact with Paperless Post. We didn't think about this initially, but then we realized that receivers are as important and are also our user. Also, it's a free user acquisition channel.
  • Nielsen's Participation Inequality: "90% of people are lurkers. 90% of postings are from 1% of users, a big participation inequality curve. As a founder, you don't change the fact that there is an inequality curve. But you change the shape of the curve."
  • Vanity is what drivers PaperlessPost, at least for senders. 
Thanks Alexa - we loved the keynote!

Alexa Hirschfeld

The CEO of Paperless Post has just started!
There are still some seats available at the sides of the auditorium

Thanks a lot to Alexa for the great presentation!

Featured Speaker Starting Now

Our first speaker of the day (Alexa Hirschfeld) well begin very soon in Burden Auditorium!

Registration Open

Registration is now open in Spangler Williams Room - available tickets are selling fast!

Cyberposium TODAY

It's finally arrived - Cyberposium registration begins in 30mins (I hope everyone remembered to put their clocks back last night)!

Please download our mobile app (Cyberposium 18, powered by Mobile Roadie) with which you can check-in, tweet, post and get all the information about the event and speakers

Also remember to follow @Cyberposium on Twitter

Stay tuned for live blogging all day long!

Friday, November 2, 2012

Cyberposium is SOLD OUT!

Sunday is almost here and this year's Cyberposium is sold out!
UPDATE: Some tickets will be available on the door

I hope everyone was able to get their tickets and is looking forward to this Sunday.

Registration (and breakfast) starts at 7.30am before our featured speaker at 8.30am:

Alexa Hirschfeld, CEO of Paperless Post