Two quick design fixes lala.com can do to increase stickiness, conversion, and retention

Lala.com is a music sharing site that's been around for maybe a year or so. They've built some great traffic and have a product I use every day now. I first heard about it actually from Posterous users who kept asking for the ability to embed Lala.com in their blog posts. It's US-only for now (sorry, International friends) but at least now I don't have to pine away for a re-activation of my Spotify account.

As a product, it's great. But there is always room for improvement. Here are a few basic design changes that I think could give a big ROI.

1) Incentivize long-lasting value by switching the Play and the Add to Queue button

When I first saw lala.com, I thought it was yet another in a line of many music services. I, like every new visitor to every site, had my mouse hovering over the back button. Luckily I stayed around long enough to discover its value. They have pretty great song libraries that have everything from hits to the obscure parts of the catalog. And they allow you to play the whole song through once for free, which is very impressive.

They've expertly engineered the site to be playable at all times even during browsing. This means you can actually just browse around the site without ever stopping your music player. (It's something that our friends at YC-backed thesixtyone.com do really well too.) But the main call to action on most songs and albums isn't to take advantage of this ability to create playlists.

Instead, it's a play button that causes it to play now. Many users may not even realize they can queue long playlists of songs. Instead, a 'queue' button is next to it, but as all designers realize with time -- if it's a secondary action, nobody uses it.

The fix: Make the queue button default, and show a tooltip or flyout that teaches the user that they've added something to their playlist. Heck, make an ongoing sidebar to the right to reinforce the playlist concept. A single song play may only last 3 minutes, but if you can get people to create playlists of music, then you've a) achieved incredible lock-in and b) proven that you're valuable. You've beaten the back button, at that point.

When you're new, focus on being as simple as possible. But when you're in a crowded space, you have to focus on showing the user how you are different and better. Lala is interesting because of a voluminous on-demand catalog of music that can be your new music player playlist. So focus on that.


2) Once you prove to them you're valuable, make it easy for the user pay you and buy into the system.

Lala has a concept of song credits, and when you sign up, you get a prominent item in the menubar that lists how many song credits you have. You can listen to any song in their system for free once, but if you want to play the full length song again, it costs 10 cents to 'buy the web song' and stream the full length song forever. Like Spotify, without the monthly fee.

I didn't need all 25 song credits to realize this was a valuable service. Yet clicking on Song Credits always shows the same text wizard above. It wasn't until I used up all 25 credits that I was shown the UI I was expecting:

It's OK and even desirable to have great explanatory text around how your site works-- but don't hide functionality that is the critical path to the user who wants to buy into your system.

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Building user experiences is just a repeating conversation you have with thousands of users every day. A faux pas here or there will not necessarily doom you, but it costs you some percentage of future customers in the end. For a service that hopes to be viral and organic, a few percentage points in conversion can result in significant deviations in outcome and success. A first impression is make or break, whether in person or on the web. Make yours count.

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The death of advertising authenticity

In the old days, you could take out a quarter page ad in the newspaper and become more legitimate. Some people would open their morning paper and see your logo and message next to the most reputable word about what's happening. Your ad would sit next to ones by trusted brands like Macy's, Cadillac and Fidelity. Ads cost a lot of money, because newspapers had costs they had to cover. Prices remained high because the newspaper controlled page count. There were finite resources, so supply and demand applied.

Today, if you take out a display ad on the Internet, you're likely to see ads for punch-the-monkey, colon cleansing, and Acai Berry scams. Ads cost nothing because of an infinite supply of untargeted display space on the web. And so if you take that ad in the wasteland of low-trust brands, you will become less legitimate.

Attention transforms into a very free-form resource. This comes directly out of the hypertext nature of the web. I can go in any direction and find any information at a moment's notice. I am not shackled to one set of newsprint sitting in front of me. When you take away those limitations, my attention can go to whatever is most interesting or most fit at that moment.

When attention becomes unshackled, we expect good stories and good products to come to us. That's how mint.com got huge without spending a single dime on traditional or online advertising. Great products and great services grow organically. Nobody will ever tell their friends about that AWESOME punch the monkey scams and colon cleansing scams they participated in. As a result, authenticity can no longer be purchased. It must be earned.

You should follow me on twitter here.

Quelqu'un m'a dit

http://www.lala.com/#song/2162009300417583850

I’m told that our lives aren’t worth much,
They pass like an instant, like wilting roses.
I’m told that time slipping by is a bastard
Making its coat of our sorrows.
Yet someone told me…

That you still loved me
Someone told me…
That you still loved me.
Well ? Could that be possible?

I’m told that fate makes fun of us,
That it gives us nothing and promises everything,
When happiness seems to be within our reach,
We reach out and find ourselves like fools.
Yet someone told me…

That you still loved me
Someone told me…
That you still loved me.
Well ? Could that be possible?

Well ? Could that be possible?

So who said that you still loved me?
I don’t remember any more, it was late at night,
I can still hear the voice, but I can no longer see the face,
“He loves you, it’s secret, don’t tell him I told you.”
You see, someone told me

That you still loved me
Did someone really tell me?
That you still loved me
Well, could that be possible?

I’m told that our lives aren’t worth much,
Passing in an instant, like wilting roses,
I’m told that time slipping by is a bastard,
Making its coat of our sadnesses.

That you still loved me
Someone told me…
That you still loved me.
Well ? Could that be possible?

The Private Equity Scam

These private investors were able to buy companies like Simmons with borrowed money and put down relatively little of their own cash. Then, not long after, they often borrowed even more money, using the company’s assets as collateral — just like home buyers who took out home equity loans on top of their first mortgages. For the financiers, the rewards were enormous.

Twice after buying Simmons, THL borrowed more. It used $375 million of that money to pay itself a dividend, thus recouping all of the cash it put down, and then some.

A result: THL was guaranteed a profit regardless of how Simmons performed. It did not matter that the company was left owing far more than it was worth, just as many people profited from the mortgage business while many homeowners found themselves underwater.

Investors who bought that debt are getting virtually nothing in the new deal.

--Profits for Buyout Firms as Company Debt Soared via nytimes.com

Corporate raiders redux. Risk-free return!

Buy a company. Sack it by putting it deep into debt. Write big checks to yourself. Then sell it before the company dies. Rinse and repeat.

What a scam.

I'm not sure who is at fault -- the private equity firms that put the debt out there, or the money managers taking the other end of that deal, allowing the entire value-destructive cycle to even happen.

Private equity is supposed to create value. For decades, some firms have been buying companies and actually improving the companies they own. But in fast times like the past decade, it's hard to avoid the lure of writing checks to yourself... because there's nobody watching.

Dan Haubert (1984 - 2009) We will miss you always.

A dear friend Dan Haubert, cofounder at Ticketstumbler, passed away this week, and we are all left with questions and anguish. When we first met Dan, it was last summer during our Y Combinator experience. He was the awesomely friendly, hilarious guy who brought 6-packs of beer to our weekly dinners. He was quick to smile and share his deep insights into everything there was to know about business.

We made a lot of friends that summer in Cambridge, MA. Dan was a lynchpin of our motley band of entrepreneurs. He left his mark on all of us, and for that, we are grateful to have known him.

Dan and I would often talk about how awesome Mark Cuban was, and I remember thinking, given time, Dan may well eclipse him as a businessman. I am shattered to think this will never happen.

Dan, please find peace.

Palantir Finance releases public demo of its powerful market analysis platform

Years ago, I left a stable job at Microsoft to join some friends working on hardcore software problems in the finance space. From the ground up, it was created to be a fresh approach to the often stale and murky waters of financial software out there. Even today, the best market analysis software falls into one of the following three buckets: barely a step up from teletype terminals, an homage to the early days of Windows 2.0 dialog box hell, or homegrown one-off software mired by hopelessly bad UI.

We set out to create a v1, new-code-from-scratch product that we built and designed from the bottom up. Yesterday, Palantir released a public and usable demo of the basic elements of their advanced financial platform. You can play with it on your computer today for free.

Click here to get started or you can read more about it below.

Disclaimer: While no longer affiliated with the company, I am a shareholder. And a fan.

Starting from scratch, the most basic building block of the platform was the Chart Tool. Existing charting tools made it incredibly hard to zoom in and out, and view and compare time series all on one page.

We wanted something that could be easily added to and compared. Why was it that before this chart tool, you had to plot time series on your own in Excel in order to adjust and correct data? You couldn't look at a graph of 10 years of data at the minute-by-minute resolution. You could only zoom in and out by fixed orders of magnitude (one year, 3 years, etc). So the Chart tool was designed to be able to show all time series of any asset class over any resolution and any time period. With finance, it's all time series anyway, right? Value x at time t. Every time series should be a first-class comparable object.

From there, we realized the financial markets were so complex that there was actually a huge data exploration problem. Traders had to memorize hundreds if not thousands of ticker symbols. Isn't that what computers are for? Being able to instantly search millions of time series became a priority, so we built this -- an extremely simple instrument selector that let you search and find all financial time series of any asset class all in one time series selector.

Being programmers, we added a dot-notation concept that became really handy when trying to understand what was going on. For instance, most time series movement can be attributed to macro factors -- e.g. the whole of tech is going up or down. What if we just wanted to know when Google became anti-correlated with XLK, the Tech SPDR index. Easy. We just type GOOG.correl(XLK, 30) to get the 30 day correlation between the two time series. We could do the same for MSFT too and see it all on one subplot.

From there, it's a hop skip away from extracting time periods in which GOOG was highly correlated vs. not highly correlated. With time periods, you could start doing backtests on trading strategies. We used to joke that there should be a "Make Money" button. With tools like this, it's not that far off.

That was just a super abbreviated tour of just one or two of the hundreds of powerful features that make Palantir Finance the essential next wave in understanding the markets. Hundreds of thousands of man hours were poured into this tool, and it's awesome to see it functioning on my own computer once again -- though I'm certain only a rare few lines of my early prototype code are still in there. ;-)

For a much much more complete tour of the basics of the software, see also the Joyride Tour/Tutorial. If you have any interest in economics, finance, or what the markets are doing, you should check it out while it's online.

I consider myself incredibly lucky to have been there for the birth of this software, and I can't wait to see where the Palantir guys take it next.

Crusty engineers unite!

Instead of working to build a great company or discover a new invention, too many of our brightest minds were busy engineering credit-default swaps.
--Commerce Secretary Gary Locke via readwriteweb.com

Graduating in 2003, it was all to common to hear about my fellow Stanford classmates go on to prestigious and lucrative Wall Street jobs. It was like winning the lottery back then -- virtually everyone from every discipline was drawn to the glamorous lifestyle that slick recruiters and Banana Republic-clad returning analysts talked about.

It was a really far cry from what I was more used to-- the din of keyboard keys clacking into the night at Sweet Hall, where red-eyed, greasy haired engineers of all fields would converge to run simulations, design VLSI circuitry, and write all manner of code late into the night.

Now it's 2009 and it's cool to be a crusty engineer again. *high five*

Build it

"If only I had ____ I would succeed."

These simple words will kill your dreams faster than anything else you could say or think. There are so many self-defeating thoughts that an entrepreneur can have, and they often take this very simple form.

One of the more common phrases you hear if you spend any time around aspiring entrepreneurs is "If only I had a technical cofounder..." This is a cringe-worthy thing to say. If you want to build a technology company, how is it that you can start without a technical background? It is not impossible, but damn near close to it. If you don't possess the skills currently to build it yourself, then you've got a problem.

There is an inverse correlation between how much you need something and how readily available that thing is to you. When it rains it pours. This applies directly to your ability. If you can code, design, market, sell, and ship your product, then you will have one hell of an easier time finding people to do each of those things for you. If you can only do one or two of those things, you've got a lot more needs, and it will be that much harder to fill them. Self-reliance fixes this.

So what is a non-techie aspriring entrepreneur to do? The most straightforward thing possible, naturally. Code. Learn to do it. Learn to build. Pick up a book and type out the examples. To create great things, there are blood sweat and tears. It might take two years or ten, but better a dream realized in ten years than not at all.

The good innovation -- the innovation that makes the world a better place and builds real wealth in society -- that stuff is done by radically self-reliant creators who get their hands dirty. Not talkers. Not dreamers. Builders.

So I leave you with one simple command as you work on your dreams.

You should follow me on twitter here.

Urgency: For early stage startup founders, you live and die by it.

At the exact moment you had your idea, ten other people had the exact same idea. There was just something in the environment that made it the right time for folks to think that one up. The race has already begun! Who’s going to execute first? Who’s going to execute best? If you want to waste nine months trying to raise VC money for that idea, great. But six months in, you’re gonna cry when you see someone else put out that same product you’re pitching me right now. Like I said, forget everything else and just get your product out the door. Now.
--Seth Sternberg, Meebo via techcrunch.com

Awesome article over at techcrunch -- must-read for the creators out there.

Get. Your. Product. Out. The. Door.