Donuts make everything better

photo by @grmeyer
Yes, they are #nom.

A couple of years ago, my wife started a donut business. Her purpose was simple: make delicious vegan and gluten-free food that people liked for a reasonable price. She test marketed batches of donuts, did some product-market fit work by selling in batches to friends, and then opened a market stall in a farmer’s market with her business partner. The business did well – they got repeat customers, sold lots of donuts, and became known at several farmer’s markets around Seattle. Yet the business wasn’t making money.

Donuts, it turns, out, are expensive when you don’t mass-produce them (and even then, you have to price them to match the expectations of the market). The component ingredients – fair trade cocoa, non-GMO soybean oil, organic sugar – and the permit fees and daily costs made the business more expensive to run than people wanted to pay for the end product. We still enjoy the donuts when my wife chooses to make them (like today). But she decided to end the business because running a business wasn’t the reason she got started making donuts, and the choices that she had to make to sell more product required changing the business so much it wasn’t recognizable.

Successful businesses deliver delight to their customers while managing to adapt to the changing business itself. When you look at the example of producing specialty donuts, you have a challenging environment (special ingredients, limited product life, and specialized demand from a certain kind of customer). If you focus on the variables you can control – how to cap the costs of the special ingredients, what to do to extend the product life, and how to market the product to a wider audience and get mass appeal – you can make that business bigger.

The business of producing frozen donuts in a mass-produced model didn’t match the original vision of delivering delicious food in person to a clientele that didn’t have a place to get tasty treats. My wife wanted to look the customer in the eye and hear their stories in person – and they were great stories! But you can only eat so many donuts. Donuts do make everything better, but you can’t eat them every day.

If the original model had looked more like a frozen food business, it might have been more successful as a business, but wouldn’t have been anything like the experience of hand crafting food delights to an underserved customer that really appreciated that product (and told you so in person). Adapting to the changing business is the real challenge – maintaining the spirit of the idea while scaling the delight.

Why Instagram Should Not Have Added Video

On the perils of changing an existing, highly engaging product.

Summer Raspberries
Instagram makes taking beautiful pictures simple.

This is a response to this week’s Startup Edition question: “How do you build engaging products?”

Facebook has a history of experimentation – changing things wholesale for large groups of users – and of changing the service so that it stays novel and rewards customer usage. So when Facebook bought Instagram and didn’t outwardly change it, I breathed a sigh of relief: perhaps they would keep a nearly perfect product as it was. I think there’s another reason driving the feature addition for video. Facebook needs additional revenue (eventually) to justify the $1b acquisition cost for Instagram, and customers are used to video ads on their TV. They might get used to video ads in their social streams as well.

Many customers really hated this move, because Instagram was already an incredibly engaging product. The uproar uncovers some interesting lessons about the process of creating engaging products.

What was great about Instagram?

Instagram succeeded by doing just one simple thing (capture instant memories using a square photo format on your phone) and making it fun – but not too fun. Instagram also succeeded by building a community of people who love pictures and who wanted to share those photos and ideas with each other. And Instagram borrowed some social metaphors from other successful products (notably, the hashtag from Twitter).

You might argue that Instagram succeeded by having a tight focus and a small, dedicated team that worked wonders and encouraged a community to do great stuff. (You’d be right.)

4 Things That Will Make Your Product Engaging (And Great)

The Instagram team did several things right on its journey to create an engaging product:

1) Collected the “I wants” and “I needs” – I want to share photos, and I need it to be easy, and I want it to have fun filters

2) Separated customer pain from general issues – There are many ways to take pictures, but when Instagram was created there weren’t many ways to share them quickly with friends

3) Identified a crisp problem statement – Why can’t I quickly share a beautiful still moment with friends and discover other great moments?

4) Focused on the everyday experience and made it great – they didn’t try to build all the features, just the ones they found people might use to capture moments in just a few steps, every day

What made the single purpose app 10x better?

The Wow Factor – the way that Instagram exceeded the expectations of customers – is the ability to jump into a social stream of moments that all look professionally produced. Standardizing the aspect ratio and using filters to tune the images to look great makes your photo stream on Instagram easy to review even if the photos are taken by many different photographers of many different subjects.

Adding video changed all of that. Instead of presenting information that you could consume at the same rate, adding video forces the customer to decide: video or audio? This seems like a small change but simply adding more, mandatory choices is a recipe to discourage engagement.

What could Facebook have done?

Facebook could have launched a separate app called Facebook Video – they have a track record of doing the same with Messages. A separate app could have created a vibrant video community without diluting the brand promise of Instagram.

Does anyone care about maintaining a single purpose app?

Looking back, I’m not sure if product managers care about maintaining a single purpose app – it’s too seductive to think about adding a habit to the habit that already exists as a means of building the brand. Is it damaging to do that? Maybe, though it will take time to tell if current or long-time Instagram users will change their behavior. I’ve turned off video auto-play for now.

Getting 800+ People to Ride for Diabetes is cool.

800+ Raised 300k for Diabetes. Awesome.

On Saturday, I rode as part of a group of over 800 cyclists who raised money for Diabetes research in the American Diabetes Association’s annual Tour De Cure event in Redmond, WA. This was the 10th annual Tour in Seattle, and we raised almost $300,000 for the cause.

I ride because I’m at risk for Diabetes and I have family members who have the disease. You should be paying attention because of the staggering public health and civic cause this disease is causing. The takeaway? We should all be trying to move more, eat less, and help people stay physically active.

Here’s an infographic on the cost of Diabetes – it keeps going up.

 

Take a look - the cost of Diabetes is pretty astounding
Take a look – the cost of Diabetes is pretty astounding

I’m keeping my Instagram account: here’s why.

saltedCaramel

If you opened a web browser and saw the news today, you’d see outrage at the proposed changes to the Instagram Terms of Service, a response from the Instagram team, many people on many social networks vowing to move, archive, or otherwise change their photos in response.

I’m not sure what your assumption was all along when you started using this free service. My assumption was that when I posted the information to Instagram’s servers that I was trading utility (hey, isn’t it fun to post cool pictures that can be seen and shared by other people) for control (because I pay nothing for this service, I expect that it could go away at any moment.) The basic idea is that “If You’re Not Paying For It, You Become The Product” (you can read the original discussion here.)

“Move to Flickr!” some say – cool, I’m there too, and I’ve paid for a subscription to Flickr since 2006 because I understand that if I pay for a service, I have better contractual rights and have the opportunity to have my voice heard. I also know that Flickr is not the only place that I can post my photographs (some of which are whimsically styled food pictures) and that the vast distribution universe of Instagram gives me a much better way to share content with a large potential user base than does the combination of marketing my own Flickr site. (Let’s shelve for a moment the question of whether Flickr should’ve or could’ve created Instagram, because it’s now a laggard or fast follower, depending upon which view you take.)

I’m keeping my Instagram account because I like the combination of fast image cropping, imaginative filtering, and the dopamine “ping” of getting a photo liked. I get some of those things from Flickr, and I’ll definitely be using their new iOS app more (note to Instagram: the focus and zoom on the Flickr camera app is outstanding). Ultimately, I’ll continue to use a mix of free and paid services because it’s always fun to try new stuff. Some of the paid services (and some of the free ones, too) will fall by the way side, and nothing has come along yet that’s 10x better than Instagram. So, find me on Flickr and on Instagram, and I hope to share great images in both places.

Go to the fair – an American Pastime

Ferris Wheel, Evergreen State Fair

Spend lots of money, ride some rides, and have a great time.

Quick – when I say “cotton candy”, “Ferris Wheel”, and “Pig Races”, what do you think? If you’re like a lot of Americans, you think of a County or State Fair. But why should you care about such an event? It’s loud, noisy, wasteful, expensive … and wonderful.

While a county fair isn’t the perfect economic stimulus we’re waiting for (this isn’t an argument for or against such a measure, just a survey of a different way money can spread in a local economy), it’s actually a great model of the American economy working in action. State Fairs involve public-private partnerships, induce people to spend a lot of money that lands both back in the immediate community and the larger community, and by the way, they are a lot of fun. So, why do they work?

The Fair Only Comes Once A Year

Fairs are time-bound – they occur annually, and usually at a specific time of the year. This creates a lot of pent-up demand and also draws crowds. When you have crowds of people who are looking to spend money (or just to see a spectacle), you get a lot of economic activity in a short period of time.

When the fair’s done, it’s done for an entire year, so people tend to spend more money than they would otherwise. State fairs are also excellent examples of reservation pricing – or the presentation of a nearly infinite way that people can choose to spend the right amount of money for them – so you can walk into the door for a low price, stroll around and pay almost nothing more … or spend all the money in your wallet.

It’s a rippin’ good time.

I’d be remiss if I didn’t point out that the fair is REALLY FUN. Whether you’re riding rides, people watching, or just strolling around to see the unusual exhibits, you are definitely going to see things you don’t see every day. And it’s a great time. 

It’s local (and national)

Whether you are talking to local 4-H kids, local vendors, or national brands, the fair is a place where your money goes many places all at once. That’s why it’s a neat fusion of hucksterism, local economy, fun, and a genuine good time.

Enjoy your local county or state fair – there’s likely one nearby – and remember, if you don’t get to go this year, there’s always next year.

See more pictures of the 2011 Evergreen State Fair in Monroe, WA here.

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