Is there another service out there that I should know about? Maybe wordpress is not for me.

It begins innocently. The start-up founders have a grand plan, which includes a brilliant strategy for viral (or cheap) customer acquisition, outstanding retention and engagement, high conversion rates, and respectable LTVs.

Then reality happens. Things don’t go exactly as hoped. And the frantic search for sweet and elusive FMFD begins.

As a VP of Marketing (or interim CMO in a consulting capacity), I have often had to “manage” founders in their fevered search for Magic Fairy Dust — they want to find some FMFD ASAP and sprinkle it on their start-up to “get them back on plan”.

The urgency that the founder(s) demonstrate in searching for FMFD is often inversely proportional to the amount of real marketing expertise and/or deft product management skill that the founders possess. In the worst cases, these competencies are viewed as simple functions that can be debugged or quickly re-worked and restored to the expected trajectory.

Stated more clearly, the founder(s) under-estimate the expertise and organizational commitment required to deliver a compelling product experience and/or marketing competency to propel the company into a period of high-growth. And panic ensues.

Other factors that correlate highly with a twitching, hyperactive search for FMFD include:

• the perceived effort or time required to close the gap between current and expected/desired KPIs
• the amount of ego damage the founder feels that they will suffer when they have to re-visit projections with their team and investors
• the amount of hubris the founder(s) brought to bear in constructing the original grand plan

It’s easy to sound whimsical about it, but this belief that FMFD exists and is findable has a very similar fall-out to substance addiction. There is denial. There is paranoia. There is panic. There is second-guessing of those around you. There are gripping pangs of hopelessness and self-doubt. And sometimes a palpable sense of desperation when the new ideas about where to find the FMFD suggests places that are really hard to reach with the resources you’ve got.

Every company must make adjustments and iterate, casting about to look for fractions of a percent wherever they can and even find a little magic. In fact, that iterative mindset of test and control and iterate to improve is absolutely critical to success. But not when you pin all of your company’s hopes on endless little tweaks in lieu of a product experience that impresses and delights users and marketing discipline with some horsepower. There is no replacement for sitting with 20 people, one at a time, as they experience your product for the first time. Or investing the time to optimize for search crawlers. Or isolating and optimizing all of the variables in your paid search campaigns. Or really obsessing over the new user on-boarding paths, messages, and touchpoints. Or leveraging the social graph with the right placement and subtlety. Or mining the database to draw correlations and insights from sequential user cohorts. And so on, etc … it’s all hard work, but it represents a foundational competency on which a young company can build a learning curve and growth curve.

That’s why the mirage of FMFD is so enticing: if it was real, it would relieve the company of lots of grappling and intensive work and cash burn. The allure of a sprinkle of FMFD to knock down the projections is more attractive than doing all of the rigorous push-ups to get strong enough to wrestle them to the ground.

*FMFD might also be known as “silver bullet”, but my resulting acronym is not as cool

Their reasons are varied: two are very comfortable and not working too hard in their current gig, and a start-up would mean working harder, sacrificing play time, and less short-term income. Another of these folks would embrace the work that a start-up entails but has a deep anxiety about “cutting the cord” of a reasonably dependable paycheck from an employer. Yet another has a fragile ego and fears failure, while also seeming rather daunted by the amount of work that they would need to embrace.

If they never grapple with these issues and find a way to resolve them, I think each one will regret it.

And if they finally do, and they make the commitment (and the corresponding lifestyle changes), I think they’ll be happy they did.

Why? Because in my opinion, nothing beats demonstrating to yourself that you will follow your dreams. Success or failure is rather irrelevant; it’s hard to find an entrepreneur behind a financially unsuccessful venture who claims to regret the endeavor altogether. It’s because they’re proven something to themselves, and likely learned more than they would have if they’d stayed on their path of inertia.

If anyone reading this has any insight to share on “making the leap” in venturing out for the first time with a start-up, I’d be pleased to hear them.

Check it out:
http://ryanspoon.com/blog/2010/09/21/robert-scoble-building43-visit-dogpatch-labs/

If they like your site, they will tell their friends.

What will make people like your site, tell their friends, and come back repeatedly?

What does your site do better than anyone else, making your site worth coming back for?

Back in 1999, I was leading customer acquisition at Half.com, an e-commerce marketplace where users could buy and sell new and used books, movies, CDs, and video games at a fixed price. Our customer value proposition was driven by price and breadth of inventory, and our success rested on our appeal to price-sensitive users and the quality of our site, which removed friction from person-to-person transactions.

To attract new customers and keep existing customers active, we employed a wide variety of discounts, usually in the form of a code that was entered and redeemed at the Shopping Cart. As we continued to experiment with different offer configurations to optimize conversion and net revenue, we came to a startling conclusion.

We were addicted. To Coupon Crack.

It hit us suddenly, but developed gradually. As we fielded an array of tests, we came to know which special offers would generate the most clicks and highest conversion rate. In our quest for efficiency, we discarded those that delivered marginal conversion rate improvements. But the visit increases and conversion rate improvements were the “lure”, and net revenue impact was the hook: the coupon offers that were most advantageous for customers generated the desired order volume and conversion rate, but yielded the lowest order sizes and smallest net revenue per order.

This led to a dizzying crush of analysis: acquisition cost vs. LTV, repeat order ratios for redeemers of various offers, efficacy of marketing spend with offers of each type, etc. etc. It was numbing, but the fact remained: when we needed to hit the numbers (for either new customer acquisition targets or retention revenue goals), we reached for the coupons.

And it had a terrible impact on the business.

Because it trained customers to respond to only to coupon stimulus, like capitalistic Pavlov gone wrong. And this training often began at very first stage of their relationship with the company. We reserved our most alluring coupons for new customers only (a lesson in customer coupon sensitivity we learned the hard way), and most of our online advertising depended on these offers. Then because the retention was a separate entity with their own numbers to hit, they would occasionally (and sometimes against their will) send coupons to our entire registered user base to hit an end-of-quarter number that might have otherwise been missed. This cemented the behavior pattern: if you were a Half.com customer, you started with coupons, and if you waited along enough, we’d send you another one. And you made sure to stockpile items on your wishlist so you were ready to buy when the next coupon arrived, but not likely until that event.

That’s crack.

Now, bear in mind that I was only deeply familiar with the Customer LTV figures for the first 3 years of the company’s existence, before the company really undertook any earnest effort to wean itself from the addiction. Eventually, the LTV might have supported such tactics as customers grew to view Half.com as the single source for all media purchase and stopped looking elsewhere (the Amazon Marketplace became a very compelling alternative as Half.com diverted focus to new categories). But weaning took time, as new customers who initiated their Half.com “relationship” with a coupon eventually came to find that that was the only coupon they’d get, and no additional coupons would be forthcoming in the company’s effort to “pull revenue forward”. Those customers could comfortably purchase at any time, at impulse, and be assured that they would not “miss out” on an coupon that they might have received if they’d delayed their purchase.

I could ramble on about this forever, and if there is interest in the topic, I’ll be glad to go into some further detail, but I’ll summarize the lesson as this: Marketing professionals MUST think like the customer, and dress themselves in customer behavior at all times. Go on record with your rationale as to why perpetual discounting is detrimental to the business, even if if helps you hits your numbers this month. You may not assuage the vibrations from the Finance wonks who are clamoring for a Money Button on the Marketing dashboard that will yield immediate revenue, but you’ll spare the business a painful blood-letting of flat retention revenue until your customers’ behavior is re-wired for more “organic” consumption.

1) Talk to them directly. It’s easy… even hobbyist bloggers like to be treated like real media professionals, which they often are, in fact. Forge an earnest relationship based on real interest and relevance. Stay engaged with the dialog; drive-by one-time glad-handers are often treated roughly later on.

2) Be honest. Sometime reporters get lazy and won’t dig enough to reveal a mistruth. Bloggers thrive on that. If you conceal something or tell anything less than the truth, they will find out. If you prove to be consistently honest, you’re credible. If not, you’re a target.

3) Do the homework for them. Whether it’s market research, margin calculations, or supply-chain/channel dynamics, don’t expect the blogger to do even basic background research, unless they are looking to disprove your claims or smack you down. Blogging is appealing in part because it’s fast. If writing about your company or topic requires even a few minutes of homework, it might not happen at all.

4) Know the neighborhood. It helps if you’re familiar with the blogger’s work and the work of peers in the same blog community. And who knows, you might learn something relevant to your business.

5) Nothing is off the record. Embargoes don’t exist. Deal with it.

6) Seed the discussion, don’t advocate. If you want to see posts that cover a certain topic or address a particular issue, initiate the conversation with a thought-provoking observation or two, and solicit comment. Don’t ramrod a new discussion with a dissertation, or cleverly worded questions cloaked in naivety. Act like a credible professional and you’ll likely be treated like one. Act like a pitchman, expect to get ignored and disliked.

Zoomin.com is the 5th new business I’ve been a part of (3 of my own smaller companies, and Half.com), and one dynamic has remained consistent throughout: the Roller Coaster.

The Roller Coaster, described very well here by Marc Andreesen, is the grind of emotional highs and lows that you experience on a day-to-day basis in a startup. Some days you feel as though your company is destined for greatness or riches or both, and other days the anxieties about cash flow, competitors, and timelines make you feel like you’re holding a 1st-Class ticket to nowhere. Zoomin.com is no different, to be honest, but when you have a solid team and a clear goal, the good days out-number the bad days.

Right now, we’re close to Launch, and we’re sweating the small stuff. My own mental ball of yarn is wound a little tighter, and finding a reasonable stopping point each day (work/life balance, of course) is getting more and more difficult. The stress and anxiety are finding me on the pillow, in the shower, and on my dinner plate. My wife is taking some R&R time right now, and I am not in the frame of mind to join her, even when I do step away from the laptop.

But it’s a thrill.

I can’t wait to see how we’re received by my knowledgeable colleagues, the blogosphere of influencers and early adopters, fellow execs of other startups, the media, and most importantly, our customers. I can anticipate many of our early challenges, but nothing is as momentous as your launch day, and I’m eager to get there. Hope the anxiety levels let me get there in one piece.

Like my friend Josh Kopelman says, “you only launch once.”.

As a former eBay employee, I can say with certainty that ego flows deep and wide in the executive ranks at eBay. My sources tell me that eBay has had near-miss M&A conversations with AOL, Yahoo, and Google in years past. I was not involved in any of those discussions personally, but the walls talk, and eBay senior execs were often well-apprised of such discussions. Such intel is hard to contain amongst type-A execs for whom such inside knowledge constitutes validation of their organizational importance.

Valuation disagreements barred an AOL merger, and those talks instead yielded a multi-year “strategic” marketing partnership which turned out to be a burden on both parties. AOL sold ads on eBay for cheap, when they sold them at all. And eBay chased AOL around for years trying to extract the promised value from the vaunted AOL network with remnant banner ads and do-nothing placements while AOL focused on more lucrative CPM rates as they chased quarterly earnings targets.

A potential Yahoo merger was killed by ego. Meg would not report to former CEO Tim Koogle.

A potential Google merger was killed by ego and hubris. Meg and Rajiv did not want to be seen as having paid too high a premium for the #3 or #4 search site in 2001. Google, understanding their position of strength, would accept nothing unless than $5 billion.

So, after all of this, here we are in 2007, with Yahoo occupying what looks like a permanent post in Google’s rear view mirror, and eBay feeling the pubescent pains of decelerating growth rates in the US and Europe, slow-to-mature emerging markets, and outright failure in Japan and China. Both companies inched towards a merger with a deal that effectively replaced the AOL deal (albeit with some improvements): Yahoo selling ad space on eBay, eBay paying something closer to market value for a mix of premium and second-rate placements on Yahoo properties. Yahoo shuts down Yahoo Auctions, eBay commits massive long-term paid search advertising, and the proverbial drawing of lines in the sandbox is complete.

So, what’s holding up the consummation of the courtship? Ego.

Rumor has it that Semel’s ego is even bigger than Meg’s, and that Semel ‘s hand-picked lieutenants are full of “i’m smarter than you” syndrome, making them very hard to stomach in even casual conversation, let alone M&A discussions.

There’s also the issue of vulnerability: neither side wants to suggest that they want the deal badly, even if it makes sense. These two companies go together so seamlessly, it’s a layup, strategically speaking. But Meg will not go out as the subjugate, and will require the upper hand with regard to valuation, reporting structures, board seats, etc.

Yahoo Shopping + Shopping.com + del.icio.us = home run
eBay marketplace + Yahoo network = boost to global customer acquisition
Flickr + eBay sellers = home run
Skype + Yahoo Groups & Answers = home run
Paypal + almost anything Yahoo (IM, Flickr, Shopping, Groups, Answers, etc.) = home run
Rivals + StubHub & eBay Sports = home run (lame pun absolutely intended)

And with Terry Semel (and his ego) out of the picture, Yahoo can spin a merger as innovative, outside-the-box thinking instead of tail-between-the-legs acknowledgment that Google is kicking their ass.

This is one of those deals where the Gods of Smart Business need to strike down with great vengeance and furious anger those execs who refuse to discard their egos and do the right deal for customers and shareholders.