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11:30PM: PANEL - Visualizing Sustainability. Jon Lebkowsky (Principal, Social Web Strategies), Dawn Danby (Aylanto), Jamais Cascio (World-Builder-in-Chi, Open the Future), Joel Greenberg (Writer, podaddies.com) discuss show to present information affecting environmental impact.

Virtual Worlds: There will be virtual world in buildings give off data. This is just beginning. The Toyota Pruis is the first product that gives you feedback about your environmental impact. The capacity to analyze your footprint is growing. Bike messengers are wearing air pollution monitors in some cities in Germany.

Google Earth constructed a visualization of the spread of bird flu.

Currently, there are only visualization of how we are destroying the world. We need visualization of how we are saving the world.

Need devices that say: “I just justed use as much water as my neighbor with that shower.”

WorldWithoutOil.org

12:30PM: Pro Paypal E-Commerce by Damon Williams. ~50% of Paypal’s volume comes from Ebay. 14% average increase in sales for e-merchants that add Paypal to their sites. 51% of customers would have abandoned their purchase it PayPal payments were not available (PayPal survey of 5,000 online customers). Accepted in 190 countries. US online consumers trust PayPal more than Visa or MasterCard. 70+ currencies. 141 million accounts. $2 billion dollars stored in their platform, and it turns itself out in ~2 weeks.

2:00PM: Keynote: Jane McGonigal (Creative Dir, Avant Game). One of the formost expertises on games talks about “Alternate Realities.” A game designer’s perspective on the future of happiness. She’s also a researcher at the Institute of the Future.

Instead of trying to make games more realistic (like the real world), she’s trying to make the real world more like games.

Positive pyschology flows what makes us happy, what makes us function well. It will increasingly effect interactive mediums in design. Shouts: Happiness by Richard Layard.

Value is defined as a measurable increase in real happiness, or well being — the new capital. There will be metrics for happiness. Canada alright has a national index.

Principles of Happiness

1. satisfying work to do the
2. experience of being good at something
3. time spent with people we like
4. the chance to be a part of something bigger

Games give you all of this. Gamers: “I’m not good at life.” When you joing World of Warcraft, you have legions of collaborators. When you wake up in the mornings, that’s not true.” Nobody is going to come up and say: “You get +1 speaking points.”

Games give us feedback. Have better community. “We are witnessing what amounts to no less that a global mass exodux to virtual worlds.” These environments are set up for them to succeed. They’re learning something, getting something not in their life. Average amount of time in games: 16 hours.We need to take everything we learned about games, and do that in the real world.

For many games, in terms of the preception of quality of life, virtuality is beating reality.

What if I felt like I was as good as life as I am in games?

It’s like we invented the written word… and decided to only write books. Put the games in the world to help us navigate the world.

Chorewars.com gives you experience points.

Zyked.com treats exercise like an MMO.

Serios is a virtual productivity currency software.

“SOAP KILLS GERMS” headline in 1931. “GAMES KILL BOREDOM.” “GAMES KILL ALIENATION” “GAMES KILL DEPRESSION”

Alternate reality dsigners are trying to embed these happiness engines in everyday life.

“An alternative reality is another way of experience existence.”

WorldWithoutOil is a global simulation as if oil ran out.

How alternate reality games applify human happiness:

• Mobbability: callorbate in large numbers.
• Ping quotient: You ability to reach out to other people in a network, and your ability to respond.
• Influency: The ability to adapt your persuasive strategies.
• Multi-capitalism: People are trading different kinds of capital: money, social, intellectual.
• Protovation: Rapid fearless innovation. Failure is fun. Fail quickly and often.
• Open-authoriship: Comfort with giving content away and knowing it will be edited. How do I create something that won’t be broken by other people.
• Signal/Noise Management: Which clues and data is relevant.
• Longbroading: Think in much bigger system. High-level systems views.
• Emerginsight: You can spot patterns and are ready to take advantage of them.

How do we give people more of these powers?

• Nikey iPod - loves it because it gives her feedback, makes her want to run more
• Planes
• Sniff collars are social networks for dogs
• Prius giving you feedback.
• Trackstick

TheLostRing.com

The Important Stuff

• Look at the happiness books and positive pyschology
• game designers have a head start
• alternate realities signal the desire, need and opportunity for all of us to redesign reality for the real quality of life

Q&A

• The military uses games because it makes it better for soldiers: increases skill and distance.
• sf0.org is fun real life game
• Proctor and Gamble invented the “soap opera”
• Ministry of Reshelving
• Tomb Stone holdem
• x2 project with the National Academy of Sciences
• Secret Society of Pickup Artists - Jane: “It’s not clear to everybody that a game is being played.”
• “Games can treat a form of engagement and is preferrable to disengagement.”
• SoldierBoy dance breaks out on stage.

3:30PM PANEL - Considerations for Scalabale Web Ventures. Chris Lea (Media Temple), Joe Stump (Lead Architect, Digg.com Inc), Cal Henderson (Badass MC, Flickr), Matt Mullenweg (Founding Dev, Automattic/WordPress) answer the question: how do you scale?

Digg had servers crashing left and right. If you’re starting a site like Flickr, you’ll need to start thinking about it immedidately. Storage is key.

NetScaler is an apparatus from sucking money out of small companies.

This panel bored me, so I left.

11:30AM: PANEL - Startup Metrics for Pirates: AARRR! Dave McClure (Master of 500 Hats), Ted Rheingold (Top Dog, Dogster Inc), Jia Shen (CTO, RockYou), Hiten Shah (Crazy Egg Inc), Todd Vernon (CEO, Lijit Networks, Inc). The panel discuss measuring your users and modifying as you go.

Five steps:

1. Acquistion
2. Activation
3. Retention
4. Referral
5. Revenues

Which metrics should you focus on? Focus on critical few actionable metrics. If you don’t use metric to make a decision, it’s not actionable. PRODUCT: What to build? Build features that increase conversion. Wireframes = conversion steps. Marketing/sales: a. high volume, low cost, high conversion. Design and test multiple marketing channels and campings. Select and focus. Referral (viral promotion): Encourage referral after users have had a happy experience.

Dogster / Catster: Retention
Advertised with SEM. Tested keywords. Made landing page dynamic about where they came from. Did a promotion exclusive for DailyCandy. Started getting 2,000 registrations a day, but only 60% were activating. Changed registration path, got them up to 70%. New members cost $2, but only 8% of members were creating pet profiles. They found out most about dog and cat information. Looked at top 15 referrers (judging their quality). Used CrazyEgg with keywords. SEO: Keyword density. Added a lot of blogs for content. Tools they use: GA - bounce rate, filters, goals/funnels. CrazyEgg. SEO tools: Keyword density, spider simulator, search engine ranking tool.

legit: Activation
Signup for lijit — 15-20 minutes. 0.1% conversion rate. New process, automate almost everything. Use automation to remove over 95% of required taks. Make the process entertaining and a little mysterious. Create a situation where we reward the user at each step. Conversion went up to 4%. Scrape a user’s site. Sigup time went down to 2 minutes. “Easy to install” or “Took me only a few minutes.”

CrazyEgg: Activation and Retention
WeGame.com, ran crazyegg tests. “A lot more heat.” 40% increase in pageviews per visitor after design changes.

RockYou: Acquistion
Viral growth. Install flow (x = 5, y = 10%, viral factor = 5 x 0.1 = 0.5 viral) and engagement flow. Intall flow should generate most of your referrals: facebook, myspace have you invite your friends when you sign up. Engagement flows weaker than intall flows. Decay — invite rates decrease over time as you saturate. Acceptance rate decreases as you saturate. Engagement tends to decay.

References:

• Influence: The Psychology of Persuasion by Robert Cialdini
• Putting the Fun in Functional by Amy Jo Kim (Applying game mechanics to websites.)
• Futuristic Play by Andrew Chen
• Don’t Make Me Think by Steve Krug
• A Theory of Fun by Raph Koster

Q&A:

• Keep metrics simple if team is small, otherwise can be a rabbit hole
• Engineers have to make tools immediately
• McClure is very impressive.
• Polyvore.com are making outfits. You can put together outfits from different sites.
• StumbledUpon getting big, worth checking out
• Focus mostly on e-mail marketing Subject lines to encourage open rates.

The panel’s deck is here: slideshare.net/dmc500hats. I highly recommend looking at it. This was the best talk after Tony from Zappos.

2:00PM: PANEL - Frank Warren (PostSecret) talks about how he has seen more secrets than any other human being. There is a basic human wisdom in the secrets. New media technologies allow the group to grow and reveal itself. Secrets have appeared in All American Rejects video. They strengthen the bond of intimacy.

Most Gratifying Moment
Received an e-mail from a suicide hotline, he couldn’t help, but he posted it on PostSecrets. The community raised $30K to save the hotline. Online communities can have an affect in the real world. Women have the most fascinating interior lives. They secrets are a way for people to “come out to themselves.” “When we keep a secret we feel alone and isolated, but when we see a community” of people, we can identify. “Free you secrets and become who you are.”

“The children most broken in the world become the adults most likely to change it.”

“All of us have a secret that would just break your heart.” “I hope that PostSecret will help to change the way we think about artists.” Frank’s father: “Hey Frank, you wanna know my secret.”

PostSecret has a brand, but it is not in the commercial realm.

Latest book: A Lifetime of Secrets by Frank Warren.

3:30PM: Bootstrapping 101: The Basic Building Blocks. Bijoy Goswami (CEO, Aviri), Danny Gutknecht (CEO, Inhouse Assist), Marcy Hoen (Founder, Austin Art Start), Jonathan McCoy (Founder, Perception Labs), Alex Cavalli (University of Texas…) talk their experience.

The true gaints of Silicon Valley were all bootstrappers (ie. Hewlitt Packard).

Three paths of Entrepreneurship

1. Cookie cutter: franchising, duplication. People are repeting what’s already been done. Does not deliver innovation.
2. Funding driven: Must go to an investor and have a conversation in the absence of the customer. It took Google 5+ years to figure out how to build Adsense and Adwords. What about Overture?
3. Bootstrap: Use everything, demo/sell/build, dance with duality (have two conflicting things at a time and wait for a solution), constraint creates innovation, right action right time

Bootstrapping Ideation
What’s worth my time and why am I here? Do something that you love doing that people will pay you for. “Emerging product.” Product grows up with each iteration. The money comes from the customer.

Valley of Death
How do you use the resources you have? Optimize resources to stay alive. Building sustainable organization (growth, culture). Need to focus. Are you ready to build a sustainable organization? Are you ready to use everything within your power to move forward? Is your team committed? Fear can destroy you here. Put it aside. It’s paralyzing.

Growth
Build something of value. Growth can be dangerous. Extra resources must be re-invested. Make sure that within your tribe (internal) and your customer bsed you’re teaching your values and vision.

Awaken
The inner journey: something will be required of them. Change in thinking, operating, the world view. Company’s fail because entrepreneurs fail to grow. Shout: The Hero’s Journey by Joseph Campell “Know thy self.” You develop a committment to what you want to put into the world. Imagination and creativity. Hubris reduces your openness and flexibility.

Note that the panel did not mention creating a business plan, etc.

Q&A:

• Never stop bootstrapping. You become not viable.
• Bootstrapping Network

10:00AM: PANEL - Social Design Strategies. Daniel Burka (Creative Dir, Digg/Pownce), Max Kiesler (Co-founder, Ideacodes), Joshua Porter (Founder, Bokardo Design) talk about designing for communities.

Tie Behavior to Identify
Think Amazon or Ebay.

Give Recognition
Like ‘Top Diggers.’ Digg banned this feature because it became counter productive and over competitive. Recognition seems to work better when it comes from the group and isn’t permanent. On Digg, because the Top Diggers feature was cummulative, the top members of the community ended up at the top. Threadless: The recognition is over when the voting ends or the t-shit sells.

Show Causation
Netflix tells you many times that rating movies is related to getting better recommendations. Netflix doesn’t even tell you — they show you.

Leverage Reciprocity
Core to all the research of social psychology. When someone provides value to you, you feel compelled to provide value back. When someone gives you a recommendation on LinkedIn, the probability of getting a recommendation in return is huge. Interesting term: “Group Usability.”

Privacy and Community (begin Daniel Burka from Digg + Pownce)
Deleted his posts from the facebook Wall because he thought it was just a messaging system. Private: Basecamp, pownce, vimeo. Public: Metafilter, getsatisfaction, digg. Middle: facebook, flickr.

Privacy: Hot points in social networks
What are the things they really care about in terms of privacy? Which part of their identity is important? On pownce, they only show people’s friends as first name, last initial. Most social allow to see other people’s friends, mostly to grow community. Isn’t that weird? If you run into somebody on the street, you don’t get a snapshot into their social life.

Tracking people’s site activity.
For example, on Digg, you can see what comments you voted up and down. Fandango have ‘Rate this on Netflix.’ Isn’t that weird? From product to product? Took private information and made it public. Need to build in controls, but don’t put things in as disable-able features. Adds to feature bloat. Firefox versus Mozilla’s previous browser (SeeMonkey?). Mozilla reduced the browser to five core features. Hide complexity. Complex features should go “under the hood.”

Transparency
Show don’t tell. If you make a post, who the receiptents should see it, and it should be clear.

Summing Up…

• Clarity is at the public/private poles, otherwise prepare
• Be nuanced, be sensitive
• Give control, but not as a crunch
• Transparency, transparency, transparency

Weeding out Worms (Ma.gnolia’s experience)
Spam is a drag, spammers heart social software, our tools for good also are spammer’s tools for bad, ugly numbers: 75-80% of new accounts are spam.

Spammer Methods

• One site, many accounts and link to their Cialis site.
• Spammers trying to move content to the top of ranking mechanisms.
• Too legit to quit: few legit-looking links.
• Joe-SEO: getting rich quick. There are all sorts of dudes in their garages adding links to their bead shops.
• You can’t Fool Me: profile aware
• Had Enough Yet? - importing volume links

Magnolia realized they would never win the war, so they had to tame it. Here’s what didn’t work:

• No-follow with Google (robots.txt?). Google doesn’t go the referred URL.
• Akismet spam fighting system for WordPress. It flags accounts, and they ended up having to go through accounts.
• Weed-on-sight. If a person sees an account (an admin), they can click and hide a site immediately.

What did work:

• Accept that there’s no 100% win
• Gardeners
• Whitelist, with a shade of gray. Only whitelisted accounts show up on the site.

About Gardeners
Enabled trustd members to move accounts on and off of whitelist. Not a job, contest or vendetta. Eventually, gardeners will make new gardeners, using the network for good. Why garden? Altruism? Traffic and reputation incentive? People help themselves and the community. Ownership? What are creative ways for people to exercies ownership over the content produced?

Q&A:

• How are sites being monetized? Other than ads? Monetization of social sites needs to be indirect. Power members bring others into the fold and get recognition. Get the community excited and they’ll do marketing for you. Nobody has figured this out.
• Girl type furiously and publishing on her blog: threadnaught.net

11:30AM: PANEL - From Frustation to Elation, Getting Emotional by Design. Dan Rubin (Black Seagull), Eris Stassi (Interaction Designer, Awesome, Inc.), Didier Hilhorst (Interaction Designer, IDEO) talk about why people love and hate products.

First Impressions
Make the biggest impact. Maybe the first thing I shouldn’t do is to go through a 10-hour install. Or go back to the store to buy batteries. Once you’ve made a good first impression, you need to hang on to that. And you do that by communication. It’s key. It starts off a great relationship. Products that communicate well think about your interests, the same as a person who knows you prodicts our next steps and gets to know you. Some things are hot and some are not

Trust, Commitment, Forgiveness
What does committment mean in terms of software? A good product forgives you when you make a mistake. You’re not going to get everything right.

Respect
A user can tell when the designers of a product that respect the users. Products shouldn’t punish you for your mistakes. “…a product that can correct our mistakes as they happen gains our trust.” -Maeda. The product looks out for me.

When you’re creating a product, translate your experience with people: first kiss, great sex, being loved, being appreciated. These feels can be injected into our products. Flip side: being jumped, being ignored, frustration.

Examples:

• Negative. RealPlayer (taken advantage of), RIAA (used), phone touch tone menus (aggravated). All create conflict. Confict becomes escalation (you’re on the phone with tech support). Control — who’s in control? Things are taken over. Blame. Stubborn. Deception. Product jealousy: document formats (*.doc). I can’t take my files elsewhere.
• Positive. Hope and redemption: the Prius (saving the earth). Netflix (no fees, etc.), Flexcar (how people think about car ownership), method (the soap — no harm chemicals), TIVO (redeemed television),

Golden Rule: Create a Product You Would Want to Use
Experience of flow — storytelling. Building a scenario, engaging. Map that story out and tell it to somebody.

Memory Recall and Symbolic Meaning
Tastes, smells. Think of perfumes. Reminds you of a person and a place. Sale with songs. If you heard the fast forward sound from TIVO, you’d immediately know what it is. Sound and action. Very powerful.

Tactile Experience
How do things feel? iPhone is cold and glassy. How do we introduce tactile feedback into software? How do you do it in a digital environment? Companies add weight to products to make them feel more sexy.

Feels, Function, Form = design process. Slides at gettingemotional.com.

Q&A:

• Interesting product development going on in haptics and touch
• Designers like using textures to make things feel more human, makes things feel older, vitural weight
• Mental mapping = use metaphors that map to the real world (ie. Desktop, Folders, Trash Cans)
• Girl clothes have faux pockets — how weird is that? “The echo of an object is useful.” Another example: digital SLRs borrowing from old school photography — the audible click on a digital camera.

Mark Zuckerberg Keynote

Mark Zuckerburg interviewed by Sarah Lacy (Author/Journalist, BusinessWeek/Yahoo!) talks about his experience with Facebook and it’s future. It was a complete farce. Zuckerberg talked incessently about “helping people communicate” and “helping people to empathize.” Lacy twirled her hair, crossed her legs back and forth, and flirted with Zuckerberg. She cut him off, and tried to provoke him multiple times. The audience was tense, there were a couple uproars against Lacy. She actual said: “Can someone please send me a message about why I suck so much?” Zuckerberg’s verbiage felt contrived and Lacy was unprofessional and bimbo-ish. See the transcript, see it on cnet, or read another review.

I actually considered asking: “Are you two sleeping together?” during the Q&A.

3:30PM: PANEL - Content Boundaries: A 12-Step Program. Heather Armstrong (Dooce, CEO, Armstrong Media LLC), Margaret Mason (Mighty Girl and Mighty Goods, Founder & Publisher, Mighty Mighty Media) talk about their experience as bloggers.

Step 1: Admit that you are powerless over your users.
The Digg Revolt of May 2007. Happened around DVD codes. Digg faced a choice between editing their content, thus alienating their whole user base, or a lawsuit.

Step 2: Get frazzled and fat on your own terms.

Step 3: Know thyself.

• Are you a top down site, or a bottom up? NYTimes.com doesn’t need the audience, but threadless or metafilter does.
• What’s your comfort level? If you’re top down, how comfortable are you with putting yourself out there?
• Are you engaging? Use comments on your website, supplying an e-mail address, writing directly on your site.

Step 4: You get what you give.

• Shout: Superhero Designs Blog.
• Don’t make fun of public figures.

Step 5: Expain yourself. Be transparent.

Step 6: Avoid jargon.

Step 7: Find your sweet spot.
Set your goals: 43things.com. What is success for you? See how readers respond: Google Analytics and Mint.

Step 11: Publish for readers you want, not the ones you have.

Step 12: Follow the fun.
“The lack of authenticity is the kiss of death.”

Editorial Checklist

• Is this 100% accurate?
• Could I make this point another way?
• Will this be a unpleasant surprise?
• Could this damage a relationship?
• Do I have the resources to deal with any problmes that might arise?
• Will this anger animal rights or breast feeding advocates?

The best ways to apologize:

• I made a mistake.
• I am sorry.
• This won’t happen again.

5:00PM: PANEL - LOLWUT? Why Do I Keep Coming Back to This Website?
Ben Huh (CEO, I Can Has Cheezburge…) and Eric Nakagawa (CEO, FTW R&D) talk about their ridiculous site: ICanHasCheezburger.com.

They started off with an IM conversation with a funny image. It was Just for Fun, put ads on page, ugly blog, funny pictures (June 2007). All it has been are pictures that we thought were funny.By February of 2007, traffic doubles. The internet finds us. Our server dies every couple of days.

Nakagawa talks about his feedback loop: the burgers. Similar to netflix starts. Got exposure from boingboing.com (on home page). Started getting lots of e-mails. Added Google Analytics. March 2007: Donations and moved to cheezserver. Quota filled in 15 days. 2TB+?!? Watermarking the photos generated a lot of traffic. Bandwidth is still a concern, but now they’re sponsored by Woot!.

Eventually, Nakagawa made enough money with Adsense (after optimization) to quite his job. Wants fans that would want to print all the Happy Cat photos, print them out and post them in their cubicles. Eventually, he opted to polarize users.

Stage 2

Nakagawa sold the site to Ben. Didn’t want to change anything. They put process in place and traffic spiked: 1.5 million uniques a day. They have four developers, focus on super simple solutions.

Not every problem needs a solution.

They looked for contradictions. Some posts get millions of views, but never any comments. Why is that?

These guys are great. Totally hilarious. They speak to their investors in LOL speak. Ben: “I’m actually from the south… OF KOREA!”

10:00AM: Web Design for ROI by Niehaus and Loveday. This seems like the best book so far (in my domain). People make decisions about the design of a site in 1/20th of a second. Quote: “Am I in a well lit area or a dark alley?” 59.0% of people abandon online shopping carts. Single page shopping carts are on the rise.

11:30AM: Panel - Lessons Learned in E-commerce. Tony Hseigh from Zappos.com (Las Vegas, Nevada; 1,600 employees) talks about how their focus is on Customer Service. They take what would be their SEM spend and put it into the customer experience: free shipping both ways, 24-hour warehouse (Kentucky), 24-hour customer service, surprise upgrade to overnight shipping. This way, the customers do the marketing for them. Zappos is on track to break a $1 billion this year. Get 5,000 phone calls a day. 800-number in the corner of every page of the website. Every customer calls at least once. No scripts in the call center. Survey customers and metrics that judge customer service: “Did you feel like you were talking to a company, a friend, or somewhere in the middle?” If a customer is looking for a specific item, they even look on competitor websites. Referring customers to competitors is good customer service. No measuring call times. No upsells. #1 thing they focus on is company culture. Managers jobs are to inspire the Zappos culture. Empower people to make the right decisions for the company and customer — the reps make their own decisions. Have 5-weeks of training on company culture, taking calls from customers, and working in the warehouse. Then they start the job they were hired for. Put out a culture book, written by every employee, about what the Zappos culture means to them. HR does interviews for culture fit (a second round). This keeps the company culture, even makes it better.

Lesson #1: The E-com Business is built on repeat customers.
They did high profile advertising, such as the billboard behind home plate at Gaints stadium. They got two customers. So they decided to focus on a great customer experience and therefore word of mouth. Primary metrics: % of customers who buy again within 12 months; average number of purchases by repeat customers over next 12 months.

Lesson #2: Word of mouth really works online.
They ask “How did you hear about us?” Use that a metric.

Lesson #3: Don’t compete on price.
They offered a $10 coupon, and were therefore not as loyal. Once someone offers $11 off, they’re gone. They want customers to come for the service and selection. Now they never offer promotions like “buy one, get one free.”

Lesson #4: Make sure your web site inventory is 100% accurate.
They track every pair of shoes. Customers who’s shoes weren’t in stock never shopped with Zappos again.

Lesson #5: Centrally locate your distribution.
70% of the UPS location can be reached from Kentucky (were the UPS hub is) within 2 days. And it cost less. FedEx is Memphis. Customers became more loyal because the appearance was improved.

Lesson #6: Customer service is an investment (not an expense).
No measuring call times, no scripts. Not trying to improve efficiencies, instead making customers happy.

Lesson #7: Start small. Stay focused.
Tweak the formula to get it right. Clothing is 4x the size of the shoe market. Zappos is taking years to figure out what the right mix is. They’re letting customers discover clothing.

Lesson #8: Don’t be secretive and don’t worry about competitors.
They have extranet were vendors can log in are look at Zappos business metrics. They don’t care. Having 1,500 pairs of eyes helps run the business and creates great partnerships.

Lesson #9: You need to actively manage your company culture.
By the time some companies get up to 100 people, most cultures suck. They fire people that don’t fit. Culture is first and foremost, and it has to be a great place to work. “Customer focused culture.” A woman sent back shoes from her husband who was killed a car wreck. Zappos sent her flowers, making customers for life. The woman tells all of her friends. Somebody returned a wallet with $150, Zappos sent the money back, and made another customer for life. The warehouse worker knew it was the right thing to do.

Lesson #10: Be wary of so-called experts (including me…).
Hired consults for lots of things: setting up call center, warehouse, etc. They’ve found most of them were a huge waste of money and resources. Consultants eat up time. Zappos has to undo most of what the consultants have done. Consults aren’t running the business, they don’t know. You have to trust your gut. Don’t rely on them too much.

Copy of presentation is at blogs.zappos.com. Search for SXSW.

Q&A:

• Speed of page is quite important to them
• Decision makers need to buy into not being secretive
• Done experimenting with shopping cart. For them, removing steps didn’t improve conversion. But, people are getting more savvy and it keeps changing.
• 80% of calls answered in 20 seconds in less. They do overstaff, but try to get people on other tasks. Purposely not as efficient.
• Create customer evangelists. They have “tell a friend” on the website, but they don’t work that well. They focus on story worthy moments.
• Book: Made to Stick
• They use Google Analytics and their own logs
• Make decisions on the brand and culture, not on improve the top line or bottom line revenue
• They don’t want customers look to save a $1 from they’re not loyal.
• First step is to define culture. Zappos Core Values. If employees don’t live up to them, they get fired. People are held accountable. Employees get small rewards to say “good job.” Values aren’t the “random management idea of the month.”

This was the best talk so far.

12:30PM: Mobilizing Generation 2.0 by Ben Rigby. Talks about how politicians are using MySpace and Facebook to find and profile potential voters. Mentioned Hillary’s horrible video, how it’s not a conversation and she got flak for it. Mention “Yes we Can.”

3:30PM: PANEL - Stuff we’ve learned at 37signals. Jason Fried from 37signals talks about their experience.

“The great unknown”
When launching a project or product. What happens if? What happens if have 1,000 customers? Fried: “Who knows and who cares?” 37signals giving people 4 day weeks instead of 5. They’re letting people spend money. They’re helping people with their interests. “Change if you need to change.” “Optimize for now.”

“Red flags”
Red flag words: need, can’t easy, only, fast. Need: The word need puts a barrier up, prevents discussion. Very few things actually need to get done. Use maybe, or “how does this sound.” Don’t say “need.” Can’t: just do it. Easy: describes somebody else’s job. Only: Never rarely do you need one more thing. Phase: “It’s only one more feature. We really need it. We can’t lunch without it. It should be easy. Can’t you just do it real fast?” This is a loaded paragraph.

“Be successful and make money by helping other people be successful and make money”
People happy to pay for Basecamp because it made them money. Basecamp allows them to make more money because they can manage more clients easier. Spot chain reactions, be the catalyst. Web 2.0 pressure: “How do you make money?” Fried: “You charge for stuff?” Just make sure you show people value. Mention: The Innovator’s Dilemma and The Innovator’s Solution, by Clayton Christianson. Minimize the chance for competition from entrenched players. Go after non-consumers.

“Question your work regularly”
Why are we doing this? What problem are we solving? Is this actually useful? Are we adding value? Fried: “You can remove value by adding features.” Will this change behavior? Fried: “Maybe on the edge some people will find that useful.” Take out things that don’t change behavior. Is there an easier way? What’s the opportunity cost? Is it really worth it?

“Read your product”
Freid: “The biggest sin is shitty copywriting.” To much focus on pixels, not enough on words. Words are the cheapest and easiest things to fix. Rewrite first, redesign second.

“Error on the side of simple”
Tried to do too much. We’ve always screwed up because we’ve done too much. Start with the easy way first. Don’t start a C-corp, start an LLC. Get three things done in one week instead of one thing done in three weeks. People need to stay excited. The longer it takes to develop someting the less likely you are to launch it. You can lose momentum, motivation. Keep people in the new zone. Resist the urge to do more the next time around. What do you need to do really well? Focus on what you’re good at.

“Invest in what doesn’t change.”
Focus on the stuff that works today and will be important 10 years from now. Google’s things are speed and accuracy, so they invest in speed and accuracy. Focus on fundamentals that don’t change. 37signals investing in simple software.

“Follow the chefs”
Be inspired by famous chefs. Famous chefs share, a lot. They tell you everything they know. They build their empires by sharing their empires. Build by sharing. Tell people what you know. They give away their knowledge, their technology. What’s your cookbook?

“Interruption is the enemy of productivity”
The closer you are with people the more apt you are to interrupt them. “Hey, check this out” A fragmented day is not a productive day. Passive communication reduces interruption: e-mail, IM, Basecamp. Do things like “on Thursday afternoons, nobody talks.”

“Road maps send you in the wrong direction”
Why is it that financial plans always go up? Roadmaps lock you into the past. Why would you want to be locked into decisions you made 18-months ago? It’s ok to think about the future, jut don’t write it down. Mention: Maverick by Ricardo Semler. Do the right thing at the right time.

“Be clear in crisis”
Be open, honst, public, and responsive. The web doesn’t shut up just because you have. You must tell the truth immediately.

“Make tiny decisions”
Break problems down to the atomic level. Celebrate little launches. Morale feeds off progress. You make tiny decisions you can’t make big mistakes. Companies have big cover ass sessions to make big decisions and share accountability.

“Make it matter”
Everything you do should matter. Pixels. Words. Hires. Think about if what you’re doing matters.

Q&A:

• You make great culture by being who you are.
• IT departments are going to fade away. Enterprise apps don’t matter. Small teams within big companies are using our products.
• Group chat / IM (Campfire) is most effective against interruption.
• Look for curious, motivate, honest people. Don’t care about degrees or rock stars.
• Use what you build aka. smoke your own
• It’s better for customer to grow out of something
• What would software look like if it was a physical product? Use this visualization to prevent feature bloat.
• Thinks of hacks as debt. Everybody needs it, but it’s bad.
• Fried: “If they (VCs) want to invest money, they should do their own projections.”

Tonight’s parties: Google, Frog Design, 16bit. More on those tomorrow.

2:30PM: Pro Javascript Design Patterns by Dustin Diaz. Diaz, and engineer at Google, talks about his book. Not my domain, but Diaz seems smart and interesting.

3:00PM: The Principles of Beautiful Web Design by Jason Beaird. A good book for hobbyist and beginners. He gives a shot to kuler.com. I tried that when it first came out, but the community was weak. I opted for the Illustrator Color Guide (awesome). I’ll have to check out kuler.com again.

3:30PM: Building Findable Web Sites by Aarron Walter. Not the typical SEO approach. So refreshing to hear. He emphasizes web standards, microformats, and progressive enhancement (one of my favorite concepts in this space — first heard here). Materials from the talk are here.

4:00PM: Subject to Change by Todd Wilkins. Wilkins (AdaptivePath) talks about qualitative approaches to product design. Talks about how quantative takes the human element out of products, and how this frequently ruins products. Based on my experience, I couldn’t agree more. Most companies think their customers are the elephant man. Quote: “Companies think their customers buy stuff and crap cash.” The pressure from number crunchers to validate is a terrible burden in developing quality products. He talks about moving from goals and tasks to behavior and motivation. Gives a shout to Emotional Design by Donald A. Norman (from Apple).

4:30PM: Radically Transparent by Andy Beal. About managing your reputation online. Pretty interesting statistics in the beginning. 50% of people don’t get hired because of what is found online.

5:00PM: PANEL - Bankrupt Your Startup in Five Easy Steps. Pretty silly panel, not serious or useful. Some moron in a unicorn suit asks a question. THIS is the kind of dumb shit that bankrupts your startup! Sean Tierney (from jumpbox) list of failure criteria: 1) hand over the reins; 2) over-engineer everything; 3) seek growth before profitability (shout to the Innovator’s Dilemma); 4) establish a culture of subservience; and 5) disregard cashflows. Andrew Hyde’s list: 1) Show nothing to anyone; 2) Have an exit plan; 3) everyone signs an NDA; 4) Funding is your exit plan; and 5) Theme weeks for the office (ie. Klingon week). And Joshua Strebel’s list: 1) Forget your purpose; 2) launch Under funded; 3) miCromanage your team; 4) be the King; and 5) believe the Dreamkillers.

That’s about all for Friday. The long lines sent us native. Pictures forthcoming.