Yesterday, Howard Morgan announced First Round’s investment in SinglePlatform, a company started by Wiley Cerilli.

For almost as long as I’ve been at First Round, we’ve been thinking a lot about the gap between the average experience of a local merchant and the huge marketing opportunity that the internet and social networks represent.  We’ve talked to tons of people in the space, and seen a lot of great teams with interesting solutions—but at the end of the day, the biggest problem was that we couldn’t see how people were going to solve the local sales challenge. 

Selling to local merchants has long been the Northwest Passage of geolocation and hyperlocal plays.  Figuring it out could mean untold riches, but lots have failed trying.  First Round’s NYC team: Chris Fralic, Howard Morgan, Phin Barnes, and myself had a ton of internal conversation about what we thought about this market.  We’re not necessarily sector investors, but we were really interested in finding a play that made sense here.

It’s funny how deals come about.  Back in December, I met Nikki Aurora from Icreon Global at the Anniversary Party of the Arts/Tech Meetup.  She was just getting her start in the NYC tech scene and we were talking about how to get more involved.  I told her to get to know everyone and be a connector.  When she asked me what areas First Round was looking at, she knew exactly who to introduce me to when I mentioned merchant marketing.  A few months later, in April, she introduced me to Wiley Cerilli.  After just one meeting, I went back to Chris and Howard and said, “I think I just met the guy we’re going to back in this space.”  Wiley ran sales for SeamlessWeb for 10 years—one of the best examples of a successful local sales effort.  He was extremely impressive—polished, smart, but most of all really understood what building real partnerships with local merchants is all about. 

This deal was a real team effort—Howard Morgan will be joining the board, but our enthusiasm really came out of a lot of great conversation that we all had around the space.  I had a lot of smart back and forth with Phin about retailers, group buying, customer acquisition challenges, etc., and Chris weighed in given his expertise in the sales & marketing area. 

It’s also exciting to be working with other local investors, RRE and DFJ Gotham on a deal together—and we’re glad they decided to join us for this round.  We’ve also got some serious sector expertise in the syndicate, including the founders of SeamlessWeb and Restaurant.com.  We’re seeing more and more of these types of stories—where NYC success stories like SeamlessWeb are begetting new entrepreneurs, new angels, and new opportunities.  Welcome to the next generation of the Big Apple. 

If you’re a non-technical founder, while your team is building and refining your product, you’ve got to figure out what to do with your time.  I find that first time CEOs often find themselves doing two things, neither of which is productive.  First, they spend time throwing product ideas over to your tech team like grenades—blowing up carefully laid and simple product roadmaps, scattering them with feature creep shrapnel.  They also enjoy multiple rounds of biz dev wack-a-mole—taking every inbound meeting that comes through their inbox and pinging people in their network and one circle away based on the biz dev idea of the day, flailing around the graph aimlessly like a wounded duck. 

If you’re going to do product, do product.  Product management is a fulltime job and if your product needs work before you want to throw people at it, it’s worth the time investment and focus.  However, if your team knows what it needs to build and refine, then welcome to being the “Outside Guy/Girl”.  While you should always be taking your learnings back to the team, the more time you spend out of the office selling and cutting deals, the better.

I’m a big believer that the right kind of business development deals can lead to fantastic results for a company—if planned well, appropriately simple, and executed correctly.  I think it all starts with two things:  The Standard Deal and The Pipeline.  That’s what you get when you ask yourself “what do we offer", "who wants this" and "what's the simple deal that maximizes our ROI?”

The Standard Deal

The “standard deal” is minimum viable product for business development.  It’s the kind of thing you can repeat in an elevator, simple to understand, universally applicable, and, most importantly, doesn’t burden your tech team with a lot of custom development.  Often times, that comes in the form of analytics, which is what a biz dev partner would want in order to check on the success of the deal.  Having good analytics is something every company should have from the beginning anyway, but it will take a little bit more work building a place where partners can login and check progress.  A weekly report automatically generated to get sent out over e-mail is a good shortcut.

An example of a standard deal is the one that del.icio.us struck in the early days where newspapers would put a little “Tag this article” widget at the end of every story, and in return, they’d get a feed of the keywords used to take the articles, which helped them on search and ad targeting.  Very simple, very effective.  Tie that with the story of how it enabled more sharing and very few people turned it down.

MyBlogLog could “make any site social” just by pasting a widget.  Disqus improves the conversation on any site.  These are free deals where success means just getting these widgets out there on as many sites through as many partners as possible.  Simplifying the deal means short legal contracts.  What is your standard offering?

The Pipeline

To me there are three measurements that you want to use to rank your business development pipeline.  Size, and in the absence of any other info, you start at the biggest and work your way down, ease of use—the trouble or lack thereof that you’d need to go through to get something done, and relevance.  A lot of people try to work with small easy partners first, but I’m not sure that’s a good strategy.  For one, they can be just as time consuming, and perhaps less professional or process oriented.  Two, if you strike an interesting deal with the #2 player, how much do you want to bet that the very moment it goes live, your closest competitor will be in offices of the #1 company in the market striking a deal—using your smaller deal as the example. 

Also, business development meetings can be valuable for the information they give you over and above getting the actual deal done.  You should know what it would take to ink a deal with your dream partner from day one—if for nothing else than to know where to set your goals and priorities. 

Create an exhaustive list of all of your possible competitors.  Don’t ever list CondeNast without listing every single other publisher you can think of.  Make a very simple spreadsheet:  Company, Partner Type (Publisher, Carrier, Reseller, etc), Contact person/e-mail, Size, Relevance, Ease of Use, and then a subjective priority score.  That list should be *exhaustive*.  There’s no reason why any company shouldn’t have 50 potential business development partners in their pipeline, maybe 100, and be actively working the phones, inboxes, and pounding the pavement to get the deals you need to get—be it for distribution, revenue, PR, or just to outflank a competitor.  The latter is totally underutilized.  If you go in and impress the top 50 folks in your space, it makes it that much harder for a competitor to get a deal done—because you’re seen as the category leader. 

This is where you bring in your investors and advisors.  Vet your deck with them… let them see how you’re pitching the company.  It probably even pays to get all of them in a room to pitch practice and get feedback on your value prop to a partner.  Then, once you’ve nailed the pitch, get them to go to work on your pipeline.  Circulate your pipeline to your investors in a Google doc and ask them to put their names next to anyone they can introduce you do.  Once they know and understand your pitch, the intros will be relevant—and there’s nothing worse than an investor who just randomly introduces you to a bunch of people that aren’t a fit for your product. 

When all is said and done, and if you’ve nailed your pitch, you might consider checking out nextNY’s ABC (Always Be Closing) Pitch Event with the Daily News.  Instead of pitching for investment, you’re pitching to get a deal done with the NYC area’s largest daily local.  Applications to pitch are due this Friday at noon and can be completed using the Eventbrite link on the event page.  The Daily News corp dev and digital teams will pick out the best 5 or 6 companies for a public pitch next Thursday, September 30th.  If you have a startup that could use a publisher with a large local community as a partner, you have nothing to lose.  Best of all, unlike most of the other biz dev partners in your pipeline, the Daily News has telegraphed their wants: 

“…We are looking for partners to help us extend and improve our relevance to the local market on the web and through mobile applications. The focus is on useful information that helps people engage, interact and make decisions about their daily lives. We want to participate in communication, not push.

We are looking to better provide focused, service-oriented local offerings for the five boroughs.”

Happy pitching, and remember… second place is a set of steak knives and third place is “You’re fired!”

A day or two after I joined First Round, back in October, I ran into Ari Jacoby at the Ace Hotel.  I had just finished reading “Why Don't Students Like School: A Cognitive Scientist Answers Questions About How the Mind Works and What It Means for the Classroom.”  Needless to say, how the brain works and how it interprets messages was on my mind—especially around the ones we want to keep there, like education and in this case, branding.

So when Ari told me about SolveMedia, it resonated deeply with me.  It was simple:  Take something we hate about the web—annoying captchas—and replace it with something that is easier for the user and provides an advertiser with a great opportunity for engagement.  You see, we remember things when we actually force our brain to process something through a thought exercise.  It doesn’t actually have to be deep thought—just enough that all the right neurons are actually paying attention.  That’s why you always remember names that are more difficult.  When you meet someone and they tell you their name is Mary, you forget it two seconds later.  Introduce yourself as a “Ruxy” and while they might screw it up, they’ll always remember and get close—because they have to think about it. 

It was one of the first times that I can think of where a more memorable brand experience on the web was actually *less* painful to the user—unless you count that time Doritos made the boxing ring with the punching chips.  Stuff like that isn’t scalable, though—nor does it have the kind of measurable recall analytics that Solve is producing.  These kinds of campaigns are scalable, measureable, and the efficacy are off the charts so far.

I’m excited that First Round is an investor in Solve and hope that these guys become so successful that I never have to look cross eyed at another captcha again.  If you’re using these things, please, please swap them out.  I’d much rather type in “500 Million Friends” in an ad for The Social Network than try to figure out whether that purple squiggly is an “r” or an “n”. 

Check out their cool video explaining what they do, too… 

Sometimes, my friends who don’t work in and around startups ask me what my hours are.  I have no idea how to even answer that question.  Am I working when I attend a lecture on a tech topic of interest?  Am I working when I’m hanging out with a bunch of actual friends of mine who work at startups on a quest to find the best steak in New York?  I got a potential deal from the latter, but I wasn’t thinking of it like work at all.

That’s why I think the setting of hours is interesting.  There are clearly some reasonable reasons to set some amount of expectations around work.  If your developers are working late, and then they don’t stroll in into the afternoon, they might be putting in enough time, but they might make it hard for designers and product managers to get work done in the morning. 

That being said, if the hours set are too onerous, you wind up with a company full of clock watchers—or even worse, a company focused on putting hours in versus doing great work.

I’ve always been someone who keeps very inconsistent hours.  You’ll often se me leave the office at 5 or 5:30 to go play softball—but you’ll just as easily see me stay until 10 or 11 so I can dig out from underneath a mountain of e-mail.  I enjoy that flexibility, and because our company culture at First Round is all about getting high quality work done, not just putting in hours, that feels fine.

I asked Ted from Dogster what hours they keep.  He told me something like 9:30 to 6—but it’s really only written down so no one shows up at noon.  Other than that, they don’t much pay attention to it at all—it’s a very casual, comfortable work environment.  That being said, when they’re launching a new product or release, everyone knows they stay until its done—which might be 1AM.  However that also means that when the PMs are speccing, and the designers and devs have nothing to do, they’re free to leave early. 

Hours aren’t the only thing that make up company culture, but they often set the tone.  I know personally that I hated environments like I felt like it was a race to put in hours, or that you were looked upon with a raised eyebrow if you were out before 8.  Maybe I’m just a more productive worker than you—or maybe I work more efficiently at home.  Maybe I’m really just good for 8 or 9 hours of quality work per day, and then my brain shuts off. What then?  Would you rather have me or someone who operates below par for 12 hours a day?

What other things effect company culture?  What makes a good culture?  Right now, nextNY is doing a community vote around which NYC tech company has the best culture.  I’d love to hear your thoughts.  If a company you know, maybe yours, really strives to create a great environment, nominate them!

Nine years ago, I walked up Madison Avenue with a pregnant co-worker back to the Upper East Side, after just having witnessed the falling of the first tower during the 9/11 Attacks.  I was working at the General Motors pension fund, and we were all huddled together in the trading room, which was the one place we had a television.  I had just graduated college that year.  Despite being a New York native, the city seemed huge to me, compared to the active life of being a student leader on Fordham’s Rose Hill Campus.  I never felt so small—so powerless to push back against the forces that had impacted my city.  I went back to my apartment and sat alone in front of the television, having the state of the world told to me by others. 

Today, I took off in a kayak from the Brooklyn Bridge Park Boathouse—a free public kayaking program that I’m helping to build and run.  We run out of two shipping containers in a park that, up until a year ago, was the site of a bunch of abandoned industrial piers. 

I went with some volunteers from our boathouse and a friend that I made from volunteering at the Downtown Boathouse over the last seven years.  We trekked across the Harbor, around Battery Park, past the Winter Garden and World Trade Center site, and up to Pier 40.  Given the great time we made, we pressed on to Pier 66 to the Frying Pan—it, too, a former abandoned relic that has reemerged to become a waterfront attraction. 

There are a ton of individual stories behind these kinds of activities that are rebuilding the landscape of our city.  Helping to create the world around me—to live the life in New York City I want to live and do what it takes to make that possible—is empowering and rewarding beyond words.

If there’s one thing I’ve learned in the last few years—it’s that even a place as big as New York City can be affected by a small group of dedicated individuals—and that it doesn’t have to stay stuck in anyone else’s definition of it. 

Last night, Startup Weekend launched, and New York City has never been a better place to build a technology business.  We used to be a “sad assed backwater”, characterized by “neanderthals in suits”.   Now, some of those same people call us a city of “energetic ass-kickers”. 

I’ve lived here my whole life.  I’ve seen so many people escape—leaving New York City because they didn’t find what they were looking for or felt like it didn’t fit them. 

The people that stayed?  They’re the people that have bent steel to shape it into a place they wanted to live in—through sheer force of will.  These are the kinds of people that I want to spend time with, to befriend, to learn from, and to invest in.  Everyday, I fall in love with this city—and it makes me happy that, more and more, others are not just discovering this place, but building it. 

A couple of months back we redesigned our shopping cart checkout page - this was a fairly risky project for us. 

Getting the experience right - while always a big challenge - was even more pronounced in our case.  Our customers can only purchase one product at a time as opposed to having many items in a basket (like you’d see on Amazon).  While this “simplifies” the design, it also makes the user experience tricky in that most folks aren’t used to seeing a checkout process like this.

Furthermore, redesigning our MOST critical page presents a ton of inherent risk.  What if we fuck something up?  What if less people buy now?  This could cost us hundreds of thousands of dollars.

But here’s why we knew we had to give it a shot:

The Stats

The most important metric we watch out for on our cart page is the abandonment rate.  This is the percentage of people who make it to the checkout page and then leave without purchasing.  That’s like being on line at a store, product in hand and then putting it down and walking out.

• Our shopping cart abandonment rate was at about 80% before the redesign
• Industry average is closer to 60% - 70%
• That means for every 100 people who clicked through to purchase, only 20 were actually checking out
• If we could get that abandonment rate down to 70%, we’d see a 50% increase in sales — and if we could get it down to 60%, our sales would double!

Bottom line:  It was worth the risk!

The Question is “How?”

Now that we all agreed that we HAD to take a shot at doing this, the question became, “How can we redesign this page and mitigate as much risk as possible?”.

Like Warren Buffett says, “risk is not knowing what you’re doing”.  I decided we needed more information before we did anything.  So I started doing research and stumbled on this great post from the guys at 37 Signals:  Design Decisions: New signup Form

A lot of my inspiration for the redesign (especially the right column — see below) came from that post.

I also picked up copies of the following texts:

• Web Form Design by Luke Wroblewski
• A report from the Nielsen Norman Group on checkout, cart and registration design

The book on web form design was amazing.  Luke nails the topic and I highly recommend it for anyone designing any kind of form (account setup, lead capture, etc.).

The NNG text was a bit dated but some of the data and principles outlined in the document really helped us make a compelling business case for all of our design decisions.

The Solution:

After going through all of our research and a series of brainstorming sessions with some of the folks in our marketing department, we put together a few different wireframes for the new checkout process.  We ended up split testing 3 different versions and here’s the winner:

Here’s What We Did

1.  Two Column Architecture - We broke the page out into 2 columns.  This allowed us to include additional content in the right column to help remove any objections or anxieties for our customer:

• “Hand written” note from one of our instructors
• Emphasis on our 30-day money back guarantee
• A testimonial from an existing customer

2.  Live Customer Support - Our products are typically priced anywhere from $1,000 - $3,000.  High-ticket items sometimes require more hand holding and therefore we thought a “live” conversation with a customer support rep would eliminate some anxiety for a potential buyer.  So we added a widget from LivePerson to allow new customers to chat with one of our support staff as they were making their purchase.

3.  Step-by-Step - We broke the form out into discreet steps.  This way, a person would know just how long it would take them to complete the entire process.  We wanted to get in front of any frustration a customer would have about going through our checkout page by being as transparent as possible about the process.

4.  Secure & Reliable - We really wanted to emphasize that it was extremely SAFE for a customer to give us their credit card information.  So instead of hiding it in the footer, we showcased all of our security credentials throughout the order form, especially near the order button (e.g. Better Business Bureau accreditation, McAffee security, etc.).

5.  Labels & Text Fields - To make it as easy as possible for folks to get through our order form we did a lot of work on our label alignment and text field sizing.  The Form Design book I referenced above played a critical role in getting this right. 

6.  Contact Info - We wanted to let our customers know that they were starting a relationship with REAL people and not just a website.  So we made it easy to find our toll free number before they placed their order.

7.  Copy & Error Handling - While it’s not clear from the screen grabs above, we put a lot of time into rewriting the copy on this page.  We also completely reworked how we handled errors and presented those errors to the user. 

The Results

The results came back pretty quickly.

Our abandonment rate dropped from 80% to 54%!

So we not only hit our goal, but we exceeded it by 6 points.

Overall, I’d say this was a huge success for us and really illustrates the power of using some simple user experience tactics to make a meaningful impact on the bottom line.

Here’s a higher resolution version of our new page, would love to hear what you think: