Van Halen, Marriage and Crucial Mistakes

John Marshall, Founder of MarketMotive

We had a rockin’ discussion with John Marshall last Friday at ZURBsoapbox. John discussed mistakes he’s made, as well as guidelines for success of product- vs. service-based companies. You can listen to the entire podcast below and read some great highlights from the event.

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Marry Someone Who Can Take Risk

ClickTracks started from the idea that all John wanted to know was what people click on. No 3D pie graphs, no charts, no large tables, just tell me what people click on. John convinced his wife to use all of their life savings to get the company started. She was not 100% on board but she went along with it. If his wife had not grown up in entrepreneurial environment she would have said: “Go get a job like a normal person!”

John says you’ve got to marry someone who is comfortable with risk. Since developing products as an entrepreneur is risky, you’ve got to have a spouse or a partner who understands your goals and visions.

Crucial Mistake

One crucial mistake John made very early on was that he did not make ClickTracks web based. He could never correct it. Other companies did make their services web based and were very successful (think Google Analytics). John’s background called for code which runs on a machine, he just wasn't comfortable with a cloud solution. “I still want to get my email on my own machine,” he mentioned to us. Nevertheless, they recovered their investment quite nicely when ClickTracks was later sold for over $10 million to Lyris.

Three Rules for Every Product

John shared three must haves for every product. No matter whether it's websites, web apps, or stand alone software these apply to all products. Here they are:

  1. Must solve pain or create gain. John talked about these two fundamentals for any product; if they don't solve a problem or create value, they'll go nowhere.
  2. Got to understand utility very quickly
  3. Must be able to use it for free

Van Halen and Losing Early

John shared a great analogy with us regarding losing early. It turns out Van Halen had a contract written for every venue they played. The contract stipulated all sorts of details, one of which was that the band wanted a bowl of M&Ms with all brown ones taken out provided backstage. The reason they put this detail in was not because they had a big ego, but to ensure people read the contract. NPR's This American Life has a great episode outlining this story.

If the brown M&Ms were not taken out, then the venue folks did not pay attention to details in the contract and therefore the entire set was not properly set up. Van Halen wanted to lose early. As soon as they walked in if they saw brown M&M behind the stage they walked out. Same applies in business, if you’re going to lose— lose early! Don’t fight it. We’re taught that only quitters lose. Not true according to John, if you lose early you actually win in long run!

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Soapbox transcript

John: What am I now, 43. I've had a real job in there once . . . It was a big mistake and I made it early on, and I never could fully correct it . . .Which is, we didn't make it web based . . . Developing products have a much higher risk factor than a consulting business . . ."Lose early", that actually was the business advice that somebody gave to me.

Moderator : In this ZURBsoapbox, we're talking to John Marshall, the founder of Clicktracks and Market Motive. He stopped by today to talk to us about what he learned as an entrepreneur transitioning from product to service and why Van Halen matters to a business. Thanks for listening, and we hope you enjoy Soapbox with John Marshall.

John: I'm looking at Bryan, because he's your fearless leader.

Moderator : I just let going to let everybody know it's John Marshall with ClickTracks. I'm just going to have you tell us a little about ClickTracks, how that was started. What the vision was for that, and then the parent company and how you transitioned to the new company, and mistakes along the way.

John: Are you more interested in business decisions, product development, technical marketing decisions?

Moderator : I think product and marketing.

Moderator : I think what's interesting in your story is that we've learned from your product about growing an audience. A different type of vision of a product that's still service oriented. How do you actually . . .

John: Thank you. Maybe a little bit of background. I describe myself as a software entrepreneur, I have had real job once. What am I now, 43. I had a real job in there once, and I sold software. I think I started selling software when I was 14. I wrote video games and sold them. They were on cassette tapes. There are probably young people here who don't even know what cassette tapes are. You bought software back then on cassette tapes, pre-floppy disk. I wrote the games myself. I wrote the code and sold them. I would come home from school and there were would be orders. I produced the ad, I ran the ad in the back of the magazine, if you can believe that. I did the layout of the ad, such as it was. I did all that nonsense. I duplicated the cassettes and put them in jiffy bags and mailed them to customers. I took the checks to school the next day, and on the way home I would drop the checks in at the bank.

This is actually the nonsense that I did. It made money. It actually didn't make a huge amount, but relative to that age, though, it was really pretty good. That very early got me into the idea of selling software as a product. I think my outlook is very, very heavily biased towards the product world as opposed to the consulting world. I have this spectrum of things that I think about in products versus other things that you try to make money on. You start from the worst end of the spectrum and you go to the best end of the spectrum.

The worst end of the spectrum is probably a shop, an actual store, where you're dependent on people coming into the store. It ends up becoming a job that you can't ever quit, and it's a complete nightmare. I think a step up from that is the business of consulting. Consulting is great, and I'll tell you a little bit more about what I think about consulting. I think product type things are a step beyond that. The obvious reason, of course, is that the consulting business has a natural cap on growth and it becomes really difficult to grow beyond a certain point.

A product business tends to not have such a severe cap. Actually if it does have a cap, then you've probably got something wrong with it. However, that is also important to understand, that that's my background. I so love product, and I love making them and selling them that I pretty much forced that viewpoint into whatever I'm looking at. I think I can't help it.

There's a little bit of background. The ClickTracks product, the way that it came about was. Actually does anybody know what ClickTracks sort of became famous for? Yeah, so, what happened was I was working at a company. I was actually running a software company. It was a really small company and I was hired to run it and it was during the dot.com boom and it kind of didn't work out like a whole lot of those other things did. It was a VC backed company and that's another thing that I didn't like about it because I didn't get on very well with VC's. So, at that company I was using Webtrends which was the big product back then that we used. You guys probably used Google analytics more than anything else. And Webtrends was the 800 pound gorilla of that product space. Using that product, it sucked. It just was awful and everything about it was awful.

And I came up with the idea that if you showed people the web page, the actual page that you were interested in analyzing, and you put next to each hyperlink a little bar that says so many people clicked on this link and so many people clicked on this link. Right, that whole model, you see that in Google Analytics. And it works on most websites. Then that will tell you a lot more about what's going on on the site. And I felt that all of the pie charts and the freebie bar charts and all of the rest of it that was going on in Webtrends was not useful, I just wanted to know what people click on. If I know what people click on i can pretty much work out everything else that I need to know.

So that little invention was sort of my contribution to the whole process. And ClickTracks, the name was derived from that invention. The name also was a Domain name that I could buy fairly cheaply from a guy that wasn't using it. There was a bunch of other reasons. It was early in the alphabet. There was a bunch of reasons why we chose ClickTracks, a lot of which will perhaps boil down to it was the least bad option. But the name at least did describe the product, ClickTrack, and it kind of worked. And I decided that I would launch that as a software product which I would sell to people. All right, so it wasn't going to be a consulting thing where I was going to work out people's websites for them. It was going to be a product that you could buy and use.

And there were a few rules that we set in that product, in the development of it, which were it's going to work in ten minutes. Do you remember all of that stuff? We had this, early on we had the lunch back guarantee, do you remember that? Where if a product didn't work for you we'd buy you lunch. We actually had that on the website and it was McDonald's vouchers. One guy, one guy said I think this thing didn't work. And I went to McDonald's and I bought vouchers and I mailed them to him. Yeah, there was a bunch of little gimmicks like this. A lot of that thinking, especially Brian and I would kick around and stuff. A lot of it was because Webtrends was a really big stodgy company and everybody hated them. So it was very easy to be the scrappy little start up next to them, and they were a natural foil to our sort of lunacy because everybody hated these guys over here.

So, anyway, the product had these certain rules and it needs to work in this amount of time and so on. Crucial mistake which I made in the development of the product. And it was a big mistake and I made it early on and I never could fully correct it, which is we didn't make it web based. We tried, yeah, yeah, we tried and we sort of were able to make it web based, and there were good reasons why we didn't. And there was a whole lot of stuff behind it. But the reality is other people did and they ended up with a more popular product.

They didn't end with a better product, but they certainly made a more popular product and they became more successful because of that. And I think I didn't do that because my own background was, from the age of 14 I wrote code that runs on the machines in front of you. And that was my mindset. And it has been very hard for me to move away from that to a cloud computing world. And actually I'm still a little bit uncomfortable with the cloud computing world. It still makes me a little bit uneasy. I don't like using web mail. I want my mail on my machine thank you very much. And I think that's a reflect of my age, right, where the younger guys here go, what the hell is this guy talking about? Why on earth would you want anything on your machine?

But I'm willing to acknowledge it and admit it and it's hard for me to move away from that model. So that was an example of this sort of product, traditional product. And of course you can have software as a service, which really is also a product. But I think you'll agree there's a slight difference there and I never got into that mode and it limited what we did with the company. And that was unfortunate. I think we, given the architecture of the product we actually did a pretty good job of dealing with the limitations but I baked into the DNA of the product, that limitation right from the start, that was a mistake [Bryan] would beat me up over this a lot.

Moderator : [inaudible @10:21], so it turned out, okay.

John: That's right, it turned out, okay. Bryan's history with the company was right from the start. You weren't the first paid person involved in the project, you were the second paid person.

Bryan: [inaudible@ 10:42] early on.

John: Is that right?

Bryan: I got personal checks. I didn't go to your house, which wasn't your house, you were living at your parent in-laws.

John: That's right I was living at my wife's parent's house.

Bryan: In fact, my interview was at his parent in-laws house.

John: It was across the dining room table. I remember it well. Just to talk for a moment about entrepreneurship, I had this idea for the ClickTracks product and I said to my wife, my wife's name is Lisa. She comes from an entrepreneurial background, her father was a Silicon Valley entrepreneur, actually he invented the [Sea Moss Gatoray @11:31].

For those of you into electronics Gatorays were a big deal, and Lisa's dad was the inventor of the Sea Moss Gatoray. For her, conversations about business were a natural part of her dinner in the evening. Her parents would talk about business and the problems [inaudible @11:51] and she grew up with that.

This was a reason why I wanted to marry Lisa, because it's very hard to meet somebody that's comfortable with this stuff, and is comfortable with risk. I mean it's really hard. Developing products have a much higher risk factor than say a consulting business, or job. I could take it all the way back to job, regular risk, a shop where you sell stuff and whatever, that has more risk, but it certainly is less risk than consulting that has more risk.

Then product is like off the chart over here. And trying to do that kind of stuff which I said, at an early age is what I do and I am an entrepreneur because I'm basically unemployable. Nobody in their right mind would hire me. I make too much trouble, just no. Keep this guy out of here.

So I'm forced to be an entrepreneur. I think that's the harsh reality of it. So now you go through life and you've got your life partner or your spouse and if that person is not on board with that thinking, then it's really limiting for you. So one of the things for me that was so wonderful about Lisa is she grew up in that world.

So going back to the start of ClickTracks, I said to her, you know, I have this idea for a product, and at that point I was unemployed, because I'd been fired from the company I was purportedly running and she had this crappy little job selling technical software.

I said to her, I have this idea for a product, and I think it could turn into something. I want to spend our savings developing the product and launching the company. And she was not with us 100%, but she did in the end go along with it, and I think somebody that had not grown up in an entrepreneurial environment would not have done that.

They would've said no, the risk is too high or whatever, whatever, whatever. Go get a job, why can't you be a normal person. All of the other things that we say in our head but hopefully don't say out loud if we want to stay married. Of course it worked out okay, in the end.

I mean everything came together, but I think a really important point of our product development is that you have to take that sense of long vision with it such long-term thinking with it. It can be years before you make revenue and you've got to be comfortable with that, and Lisa was.

So anyway, just to go back, we were talking about the early days when we were starting it that meant, because I had my wife's support and she was okay for us to spend out savings, developing the product, and launching the product that meant I didn't have any VCs, I didn't take any outside investors, I didn't do any of that crap. And that was a big deal, that was really a big deal.

It meant that I could make the product do what I thought was the right thing to do. I didn't have a VC telling me: I just read this article in Business Week, or Forbes about sells of stuff in China, and I think that you should be hiring engineers in China. And I'm, no I'm not going to do that, I think that's dumb. Right. I didn't need to justify all of that because I hadn't taken money from him. It meant that I could make the product do what I thought the customer wanted, and I didn't need to explain it to anyone. I needed to explain it to Bryan, but, other than that we didn't need to.

So what then happened was web analytics turned into this fairly hot thing, everybody wanted to be doing it, the products were hard to develop. Web analytics has this really difficult problem to solve of scalability, and it is a crushing massive problem that you just can't get away from. And therefore the ease with which people could bring a web analytics product to market was seriously curtailed, right. You ended up with a small handful of companies that have worked out, you know, different approaches for sure but how to crack that scalability problem. And that made the whole thing valuable and in the end we were able to sell it. We sold it to a company named Lyris and that was a pretty nice sized deal. I didn't have investors that had diluted Lisa and I out of the picture drastically. So that was pretty nice.

Moderator : How long did it take you guys to re-coup the initial investment? Did you ever [inaudible 16:26]

John: You mean before we sold it?

Moderator : Yeah.

John: We never recouped it before we sold it. Yeah. I mean actually there were. If you think about it from the business point of view, that initial investment that we made, you know we spent our money Lisa and I, to develop it and launch it. We really did not get that back at all until we sold it. Because there were too many times where, we're not going to make payroll. Right, and we'd just write another check to the company. Or I didn't pay myself for months on end, right. There was all that kind of stuff going on. Sort of the behind the scenes stuff of entrepreneurship.

Where, again, if Lisa were not on board. And she, she wasn't thrilled about it, you know. Sometimes she's right. So it was not a completely straight forward thing to just somehow not pay yourself for six months. But it did mean though when in the job interview process, we were hiring people all the time. And it was a classic thing, right. Lisa would say, you're hiring people and you're not paying yourself, you know something wrong with that. And I was like, well you know I kind of need to grow the company, my instinct is that this is the right thing to do.

Somebody would come in for a job interview and they would cheerfully ask me about the profit sharing plan. You know, tell me about your profit sharing plan. And I would cheerily look them in the face and say, we don't have one, but we don't have a loss sharing plan either. And that would shut them up like right there. The up the down.

So we did not get the investment back until we sold it. But that's fine, right.

Moderator : So in your transition now into going to the product. What you have now is scales of the product but there's still a service component to it. What's the thinking now between going from the product to . . . you've got the bit thing put together and now you have humans who are actually...

Yeah, I mean now we sell subscriptions to content. What we do now is we sell a training course, that's basically what it is. And I think one of the key things that I wanted to avoid was being pigeonholed into, I get something from you and I install it on my computer. Having made that mistake before, and maybe I exaggerate in saying I made a mistake. I mean, holy cow, I did still manage to sell the company and it was for a big return on our investment so I don't regret that at all. But I did want to reign in that problem that I've created for myself and I wanted to get comfortable selling something other than a tool, right? And it's basically what I've been doing all the while long is I've been selling tools. And I wanted to get some beyond that and I felt that subscriptions to content would be a good thing.

Now actually, it turns out that has not been the adoption of it that we expected. Mainly because we're ahead of the market. We sell people training material, right, that teaches say SEO or paid search or web analytics. We sell training courses that teach all of that. We have people say to us, is it in Dallas? I live in Dallas. When are you coming to Dallas? And it's actually hard to get people to understand, no these are online courses; it's video based material. There's a quiz in there, there's a test, it's a webinar as well. All this kind of stuff. People still come to our website with, when are you guys coming to Boston. The problem actually has been that we're ahead of the market's expectation, which I think is surprising, right

Moderator : Do you find that you instigate through the problems, that you think about the business in a different way, product [inaudible 20:23] new venture or is it similar type of thinking of how to create the most value [inaudible 20:27]

John: I think in the end we are still really a product. We think of it as a product. Our customer doesn't. That may be the problem. They don't think of it as a product that they buy. I think we saw the way the world was going, with content online and all that kind of stuff. Because we could see that was the way the world was going, we assumed the market was there as well. It hasn't been. It's changing now, but we started two years ago, and it really wasn't there two years ago. We were too early. I think that's the reality. We were too early by two years ago. Now, people are starting to catch up. The market is catching up to us.

I think one of these quotes contributed to Napoleon is that a good general leads from the front, but not so far ahead that the curvature of the earth makes him disappear. We may have suffered from doing that and now people are catching up to it. We also do some consulting. That's another thing that we do. Doing the consulting, and we just say, SEO consulting, or paid search consulting, web analytics. Exactly what you would imagine. It's all fairly straight forward stuff. We do that because doing consulting gives you one magic thing, which is knowledge of what the market wants.

If you do consulting, and I know you guys are heavily involved in doing that, the magic of that actually is that you start to know what it is that people have big pain with. Your job in offering a product, of course, is either to solve pain or create pain. You've got to do one of those two things or you don't have a product. So, you start to understand that. I think that is something that we do, and we do some consulting. We're trying to get away from it and do less of it, because it's starting to become a distraction from selling the product.

In the early days, that was a really useful thing to do. And that's a situation, where despite my bias as a product guy, I forced myself to swallow doing consulting so that we would learn some things. I don't really want to be doing consulting, but we have to.

Moderator : Give us the top three things that you think are important to product, and the top three things that are important to consulting.

John: Products have got to solve pain or create gain. Actually, most products solve pain. Most products that we're going to develop, that has a web based tack, they solve pain. Is that my natural bias coming in, because I'm a tool guy and I can't help but think of solving problems and that's what tools do? Certainly, Facebook doesn't solve pain. That's a pure gain product. But, I tend to think of what problems the product solves. If you're selling business products, then maybe that's it. They solve pain. That number one, what's the pain you're trying to solve. You've got to understand the utility very quickly. So, can you grok it in three minutes. Can you use it for free? I think free is required. Interestingly, we don't allow you to use our product for free. We don't meet that rule.

Moderator : There are lots of kinds of free, free for thirty days, free forever. What's your experience?

John: I think they all work in different situations. If you have to give somebody money before you can experience what the product is like, I don't think that works anymore. It used to, but the world doesn't work that way now. On Notable, is there is a free version?

Moderator : Yes, for less than three persons and less than thirty days for a preview.

John: That's a classic example, and you probably couldn't sell any if you didn't have that.

Moderator : Not at the moment.

John: So, what are the top three things in consulting? I think you've got to be personable. It's really different, right? Consulting is a one-to-one human business. You've got to be personable. You've got to be an expert. You've got to be good looking. It helps, right? It's probably true. We're all kind of uncomfortable about that, but it's probably true.

Moderator : Tell us about the Van Halen connection.

John: Van Halen. It is actually a pretty interesting business, in product design and everything else. Here's the story. Does everybody know the brown M&M's thing? Does anybody not know the brown M&M? So, I have to explain the background to it. I was going to say it's an urban myth, but it's not, it's completely true. Van Halen, the rock band, when they went on tour, they have a contract rider. The contract rider stipulated all kinds of crap that the band must have before they would perform at the venue. A litany of stuff.

One of the things in the contract rider stipulated the list of snacks that were to be provided back stage. In the snacks, it explicitly said, "M&M's, with all the brown M&M's removed." You can see this, and the band agrees that this is the case. This became notorious as an example of the ridiculous ego of rock bands. Why would they require that? It was also was attributed to the fact that brown M&M's have a food coloring in them that causes cancer and so on. Why was it the brown ones? Why not the orange ones? I never understood that? But, people thought that.

I'm not making this stuff up. It's all over. You can read it on their biographies. There is actually a very good business decision as to why Van Halen required no brown M&M's in the snack. This the interesting part. Does anybody know the business decision? You know it?

Moderator : It was to make sure that they actually read the contract.

John: That's exactly right. When Van Halen went into the backstage area when they arrived, and the snacks were supposed to be all set up, they could look at the bowl of M&M's, and if there were brown ones in there, they knew that people hadn't read the contract. That meant that, for example, the weight bearing part of the stage where all the lighting equipment was going to go, they probably hadn't read that, and they didn't know how much of the crap that Van Halen brings on stage, how much that weighs. All these other very important details about the contract, they had no idea.

They put that in as a way to lose early. That was actually the business advice somebody gave to me a long time ago. If you're going to lose, lose early. Don't thrash and struggle and find ways to not lose and all the rest of it. There are plenty of situations where losing early is a good thing. The example they gave to me was in sales. Selling a product, lose early, because you have got to spend your time on something else. In product design, and thinking about the way we put together products, we need to remember that. Losing early is a good thing, because it allows you to focus on something else instead.

You may be thrashing around with some little thing over here and trying to make it work, when maybe you need to lose early. We're taught not to do that. We're taught to keep fighting and struggle, that it will be worth it and only quitters win or something like that. Winners never quit, and quitters always lose, or something like that. We're taught all that stuff, but there's a flip side to it. Lose early.

Moderator : [inaudible 29:28] VCs. The VCs will give you these Hollywood no's and you keep coming back and you find that you're basically [inaudible 29:34]. A quick validation [inaudible 29:39]

John: That's right. Yeah. I think VCs are pretty good at telling entrepreneurs. It's just that entrepreneurs won't listen.

Audience Member: That's not quite true. VCs are known for doing [inaudible 29:58]. They have to report to [inaudible 30:00] . . .

John: With the companies that I've already invested in, I agree. We're actually talking about companies who are pitching for investment.

Audience Member: Once the companies are in, VCs actually get a lot longer they should.

John: Yes, yes they do.

Audience Member: They have to go back to their partner and LCs and explain them why they screwed up; they don't want admit it [inaudible @30:19]

John: Better to not book a loss. They want avoid booking a loss. I'm with you 100%.

Audience Member: Does your consulting help you decide on what courses you're going to put together?

John: It does, actually. It has. We see a theme in companies and they're always struggling with this certain thing, and we do actually then put together a course. I think it helps less than you would imagine, because the people that we have that build the courses usually are more knowledgeable than we are. In fact, they also know it, and they tend to be addressing that problem anyway. That's something we didn't anticipate. That's another reason we're trying to get out of the consulting. It's helping less than we imagined it would. I think that's unique to the way that our company operates, because we draw on outside experts, that we call the faculty. They teach material. They produce material. They are all highly expert in each of their disciplines and we serve to package up their material and put it in the course, put other things around it and sell it. It's kind of unique to our process of building product, and we have that advantage. It hasn't helped as much as you would think.

Audience Member: Have you been in the situation where you had to move warily but you didn't?

John: Yes. We sold ClickTracks to companies that didn't need it, didn't want it, couldn't use it. We did. Sometimes we would thrash and try to make that customer happy, and it was a mistake. We should have said right at the beginning, "I'm going to give you a refund, and I'm going to write you the check this second." In one case I did do that. I did. I can't remember if it was early on or later. If it was later, I had probably learned by this point. There were customers where we tried to save the sale. We had already sold it to them. It wasn't the right product for what they wanted to do, but I was going to try and convince them that it was. It never worked. We should have just cut them a check at week one, instead of week twelve at sixty hours into it.

Audience Member: In scaling your business, ClickTracks [inaudible @32:44] ?

John: That's about right.

Audience Member: And now you say you have a core base of 400 employees? Did you learn anything about scaling the ClickTracks you applied to the new business or do you basically try to replicate the same type of methodology for making decisions [inaudible @33:03]

John: I think the problems at ClickTracks were orders of magnitude more complex. We could attempt to develop a feature in the product, which then we couldn't scale. Although it was a clever idea, it just wasn't going to work because of the unique nature of what you're trying to do with web analytics. That made a more consensual approach, because it had to be. Our CTO, Dr. Turner, he and I would kick it around. I'd say, "I've got this great idea," and he'd say, "Well, you know we can't do that because we have to measure the size of the entire universe, thank you very much."

And I thought, "Oh, right. I didn't think that. okay." So, let's go back to measuring the size of the room, because we can manage that. The discussion of what the product should do at ClickTracks, was very tightly bound up in what can we technically make work in a scalable way. At Market Motive, it isn't that way. We can pretty much do what we want, and we know that we can make it scale, because we're dealing with a few thousand people. It's trivial. There is no scalability problem. It's easier now.

Audience Member: Do you feel that you make quicker decisions [inaudible @34:21]?

John: No, we don't, actually. You would think that it would lead us to making decisions faster, but we don't. Part of the reason that we don't make decisions so quickly is that it's too easy to trip up our existing user base, so we can't do things in the product. They're viewing it as an education tool, and people view education as this very logical step by step thing, and we bamboozle them. If we throw something into the middle of it, their brain explodes. So, we actually take a more measured approach than you would think. It's ironic. We're more free, but we're also more constrained by what our customers expect, and education is quite old fashioned, even if you're delivering it online.

Audience Member: Right, because I would imagine if you introduce something new why didn't you know that before, when I gave you money to teach me something?

John: Yeah, there's that — do I really trust you guys to absolutely have all the answers because you seem to have not had all the answers two weeks ago.

Audience Member: Right.

John: Because now you claim to have all the answers. Yeah, so, it requires care, it requires care. But I think the decision-making process at ClickTracks worked really well because I ended up being the customer. I was the customer of the product. If the product worked for me, it would work for the customer, and I was in effect the product manager; as well as running the company I was the project manager. And then we had a CTO, this guy Dr. Steven Turner, I mean a really, really bright guy- stats background- and he could say, "We can't calculate that piece of data that you want, and it's not useful, anyway. Here's an alternative piece of data that we can calculate and is much more useful." And we were a natural foil to each other. So I think it worked well at ClickTracks but it was a personality thing also at ClickTracks.

Audience Member: So the data would decide which feature you would add to the product? You, or would it be you? So Dave from Technorati talked about this, and he said he was the major customer of the product, where he would think that a certain feature would fulfill his own needs and end up implementing that, and kind of looking at the data, but not really, and he got himself in a little bit of trouble. Any experience with that?

John: You mean adding a feature that actually wasn't useful?

Audience Member: You weren't actually using your own company to analyze what was successful with your decision, so, you know, getting kind of lazy with the decision-making, because it's good for you, so it will build product for me, but at a certain point missing opportunity in the market [inaudible @37:10]

John: Yeah we did, we added features that I thought would be really useful, and people didn't use them. They didn't use them sometimes because they couldn't understand them, you know? I'm trying to think back to some of the things that we added. There were a lot of examples of that where because I was so dominant in asserting that "I want to product to be able to do these things," I was right more than I was wrong- you know, this is all about we can hope for in life, right, you know- but I was still spectacularly wrong in some important areas.

Audience Member: This is a very tactical question, but I remember ClickTrack . . . [inaudible @37:52] video [inaudible @37:53] trying to share ideas through videos.

John: Yeah.

Audience Member: And I know you guys do it heavily with market motive. Is there anything you've learned from using video in both product and marketing, and how that [inaudible @38:04]

John: Yeah, that's really interesting.

Audience Member: Time of videos, content of videos, reason why you use them, before a sale, after a sale?

John: We use them--the product that we sell is primarily these videos- but one thing that we avoid in the videos is talking head. We try to avoid that. So we in the actual training content we record a live voice and we record screenshots and we annotate the screenshots with what's going on. If you have a talking head that is associated with cheap poor quality stuff that you can get for free. So if you're talking about SEO and let's say your trying to teach SEO, I can go to YouTube and I can watch a whole load of videos on SEO.

There are two things; they all fall into the same look and feel, which is talking head and sort of a loose free-form structure of explaining things. Now some of the ones from Google actually are a bit better. Matt Cutts will get on the whiteboard, and he'll use a whiteboard. That's a step better. We go a step even further than that, and we do a structured table of contents that you can navigate around, you can skip back and forth. The table of contents basically sums up, "Here's what we're gonna talk about."

The material typically runs from 30 to 50 minutes. It cuts to screenshots, it annotates the screenshots, it does all this other stuff, and we avoid the talking head because talking head is associated with "Hey, I just grabbed this off YouTube" and it's very hard to make money selling that. Really the key background to all of that is if you give someone a structured curriculum they are willing to pay for it. But if you give them a bunch of YouTube videos they are not, unsurprisingly.

Audience Member: I mean you guys did some loose training and explaining in ClickTrack.

John: We did, yeah.

Audience Member: Did you learn anything about if people were watching videos that actually got more engagement or if they actually confused users?

John: Are you talking about the stuff that we did right on the very first version of the Website, like the three-minute demo or you're talking about . . .

Audience Member: Yeah, the 30-second clips and ClickTrack's way you're trying to get . . .

John: Yeah, well, the stuff that was a video of me?

Audience Member: Right, yeah.

John: Yeah, that was really just an attempt to get some sort of thought leadership associated with the company and all the things like that.

Audience Member: You couldn't track anybody?

John: No, actually I don't think there was any value there in the end.

Audience Member: How about screencast? I know you guys did screencast [inaudible @40:33]?

John: Yeah. So one of the things that we did, I can say the following was highly effective. All right. Maybe we could've done other variance of this, but the following was highly effective. We put on the front page of the Website a two-minute demo of the product, and it was a video, although it was flash- based screen shots, [inaudible @40:55] type thing. It showed the product, and it gave you a tour of the product in two minutes.

And we actually found that if we made the video three minutes long, it did worse. We said on the button, watch a two-minute demo. I don't know if you remember that, but we actually put in there two minutes. And in fact it lasted two minutes, like 50 seconds or something like that, but we needed to be able to plausibly claim that you're going to watch this thing for only two minutes. And that resonated with people, because our customers were in a hurry, and they didn't want to sit around, and we needed to promise them we're not going to waste your time.

So if you watched that video, you were eight times more likely to buy the product from us than if you didn't watch that demo. It was incredibly strong. If we could get you to watch the two-minute demo, you would buy the product. And part of the reason for that is the product itself was highly demo-able. I don't know if you remember, but I think back then software products were so clunky that the demo was really important to establish to people that this thing doesn't suck, because so much stuff out there did and still does.

It's less of a problem now because products are more Web- based now, so the pain of trying a product out is lower. But back then, you can imagine, I'm going to install this thing, and I'm going to find out that it sucks. Last time I installed something on my computer, I had to get IT to come over and pour a cup of coffee into it, and it was a complete nightmare, so I'm never going to install crap again. All right. That was one of our barriers to sale, and one way that we got past that was that the demo actually looked pretty good, and the product worked well. So that was one video-based thing. The other thing was the live demo when we did the webinars. Again maybe you don't remember that.

Audience Member: [inaudible 42:38].

John: Yeah. So we did a live demo of the product three times a week at 7:00 a.m., 9:00 a.m., and 11:00 a.m. on Monday, Wednesday, and Friday, I think, something like that, and I did those demos. So we invited people in. You could sit there, you could watch the product, and you could ask questions. And that was a huge, important selling point. Yeah.

Audience Member: Next question, does Google Analytics, do you think it sucks or do you think it's a good product? Because, I mean, that's kind of the big Web-based analytic [inaudible @43:16].

John: Yeah. No, it doesn't suck. No. It is good enough for many people. The fact that it integrates with AdWords is probably the key feature. If it weren't for that . . . but it does segmentation, for example. Right. And segmentation was a feature of ClickTracks. It was really, really important. It does segmentation in a very poor way. It's just not very good. And it's hard for me to look at the design choices made by the team with the way segmentation works in Google Analytics, and is actually more specifically than the way it's reported. And not think back to when at ClickTracks we made those same design choices, and I would say to Steven, "Here's what I want. I want this table, and it's going to show this, and then it's going to show this right next to it, and people are going to love it."

Now it seems to me that at Google that's as far as it's gone. At ClickTracks Steven would say, "That is not good enough. If you do it this way, then you get even more data out of it, and then we can do this trick and it'll be even better." And we really got that kind of stuff nailed. So it's hard for me to look at what Google Analytics does and not think back to us making the same design choices and coming up with something better. However, I can't ignore the fact that the choices make it Web-based and that we didn't, and we were idiots.

Moderator : [inaudible @45:02].

John: Thank you.