DropBox it just works

I was searching for a new opportunity that was more Drop client software to a Windows, Mac, or Linux PC or to an phone, pad, Blackberry, or Android mobile device, the software created a local Drop folder for accessing files of any size or type via an encrypted Internet connection from other Drop-enabled devices or from any web browser. The client software tracked changes in real-time to any file in the user's local Drop folder, then instantly synchronized a copy of the file on Dropsy's servers, updating only the portions of he file that had changed, in order to save bandwidth and time.Likewise, within milliseconds, copies of the file were synchronized in local Drop folders on all other devices connected through the user's account. â€Å"We engineered Drop so it just worked, all of the time,† Drew explained, â€Å"We supported all the major operating systems and handled all kinds of obstacles, from flaky wireless connections to corporate firewalls, which was not an easy task. † The company adopted a fermium business model, that is, it offered both free and premium accounts.Users got 2 gigabytes of storage for free and had the option to ay $10 per month for 50 gigabytes or $20 per month for 100 gigabytes. Industry observers estimated that 2% to 3% of Dropsy's users were paying customers, which implied a $10 million to $15 million annual revenue run rate in mid 2010. 1 At that time, the company had 25 employees, most of whom worked in engineering or support functions. Drop had raised $7. 2 million in two rounds of venture capital funding from Sequoia Capital and Cell Partners.Market Overview Drop was a late entrant to the fiercely competitive online backup and storage services space. The first firms in the space, which had small companies as customers, ere launched in the late asses by startups offering outsourced storage at remote decanters. As costs declined, services also became available for consumers seeking to backup their data online. Most ear ly users were technically adept, for example, college students downloading music from peer-to-peer file sharing services.Few firms in this first wave of services survived the dot. Com crash, but by late 2006 the market was crowded again with new competitors. In July 2007, the tech blob Amassable published a list of more than 80 online backup and storage services. 2 Market research vendors like DC fueled the hype by predicting that the worldwide market for online backup services would grow to $71 5 million by 2011. 3 Investor interest in online storage surged when Muzzy was acquired by EMCEE for $76 million in late 2007.Houston was confident that Drop could succeed in the face of intense competition. He reasoned that Drop would be able to collect revenue from some users, because consumers generally understood that storage cost money, whether it came in the form of a physical drive or an online service. When challenged by endure capitalists to explain why the world needed another clou d backup company, Houston asked them, â€Å"How many of those services do you personally use? † The answer from Vs. was almost invariably, â€Å"None of them. 4 Houston asserted that direct experience with rival services, which often failed to transfer data across firewalls and sometimes balked with big files or large numbers of files, was helpful in innovations that contributed to these advantages: 2 The first generation of cloud storage services was based on a simplistic model, where file accesses were redirected over the Internet instead of to your computer's hard rive. Your operating system and all your applications assume that accessing your hard drive is cheap and fast, but when these requests are instead routed to a server thousands of miles away, they can take an order of magnitude longer.This subtle but critical distinction explains why when working remotely, even simple actions like browsing a directory can freeze your computer for seconds at a time. We needed to t ake a completely different approach by storing files locally and updating the cloud copy in the background using a number of time- and vindications optimizations. Launching Drop It's hard to imagine Tom Cruise in Minority Report sending himself files via Gamma or lugging around a USB thumbprint. Ђ? Drew Houston After his frustrating experience on the bus, Houston started working on Drop full time in late 2006. He said: I needed it badly. I worked on multiple desktops and a laptop and could never remember to keep my USB drive with me. I was drowning in email attachments trying to share files for my previous startup. My home desktops power supply literally exploded one day, killing one of my hard drives, and I had no backups. I tried everything I could find but each product inevitably suffered problems with Internet latency, large files, bugs, or Just made me think too much. To help with the project, Houston recruited Rash Overdose, who dropped out of MIT and later became Dropsy's co-founder and chief technology officer. The pair spent the next four months coding a prototype in a tiny Cambridge apartment. With a working prototype in hand, Houston came up with an innovative approach for testing demand for a minimum viable product. He had produced various recruiting videos for his college fraternity; with this know-how he created a three-minute crassest of a product demo and uploaded it to Hacker News, a popular forum for developers. â€Å"l did this out of necessity.There was no way I could ask for people's files before we were 100% sure our code was reliable. But I had a prototype that showed off the product's best features. â€Å"7 Houston used the screens to recruit beta testers and to solicit feedback on features that Drop might include. He added, â€Å"Not launching is painful, but not learning can be fatal. We got a lot of feedback through that video, so we were learning while we were building. † Houston had another reason for posting the video on Hacker News: he hoped to ND selective Y Combinatory seed fund and incubator program.He recalled, â€Å"l had Just submitted my application to Y Combinatory and as a gambit to get their attention, I submitted the video to Hacker News. I hoped it would work. â€Å"8 It did: in April 2007, Drop received $15,000 in funding from Y Combinatory (see Exhibit 1 for excerpts from Dropsy's Y Combinatory application). In exchange for a small percentage of a startup's common equity-?usually 2% to 10%-?Y Combinatory provided up to $20,000 of seed capital as well as mentoring, workspace, and introductions to other advisors ND investors over a three-month period.Many startups applied to Y Combination's program, which had a track record for matching strong technical teams with elite venture capital firms. 3 Upon conclusion of the Y Combinatory program in September 2007, Drop raised $1. 2 million of convertible debt from Sequoia Capital. â€Å"We fit into Sequoia's sweet spot: we were two youn g technical founders, working out of an apartment, targeting a big market. It helped that we were ranked at the top of our Y Combinatory cohort,† Houston recalled.He and Overdose moved to San Francisco to continue building the many, but despite the capital infusion, they continued to run lean. Drop delivered its service through Amazon's SO cloud storage platform, avoiding the need for infrastructure investments and positioning the company to scale rapidly. The co- founders created a private beta program for a limited group of users who registered through a simple landing page. The page contained a short description of Drop and requested an email address from visitors interested in participating in the beta test (Exhibit 2).Houston commented: There's a spectrum of well-informed opinions about when to launch your product. At one end, Paul Graham tells entrepreneurs, â€Å"Launch early and often† to accelerate learning. At the other end, [respected software guru] Joel Spoo ky says, â€Å"Launch when your product doesn't completely suck. † We were managing people's files, and it's a big deal if you lose or ruin them. That meant moving toward Spooky end of the spectrum and keeping our beta test small. Next, Houston devised ways to generate demand for the beta service.In a guerilla marketing move, he produced another short demo video and posted it in March 2008 on Dig, a site that showcased web content deemed popular by Digs users. Houston felt it was essential to communicate in an authentic manner with the tech enthusiasts who frequented Dig. He sprinkled â€Å"Easter eggs† into the video, for example, references to Chocolate Rain (a Youth phenomenon), TIPS reports used in the movie Office Space, Mitt's Gillian Hall, and the 09 IF key for decrypting Blurry disks (dissemination of which, in the face of movie studio legal threats, was a hacker crusade).With this tongue-in- cheek nod to its tech-sway audience, the Drop video soared to the top of Dig, few days. Overnight, the list for Dropsy's private beta Jumped from 5,000 to 75,000 Ames, far exceeding the team's expectations. Building the Company Make something people want. -? Y Combinatory motto Based on consumer response to the second video, it appeared that the promise behind Drop-? â€Å"It Just works†-?resonated with potential early adopters, especially those who were familiar with the performance limitations of existing online backup/ storage services. Houston shifted his focus to product development.The Drop team was comprised almost entirely of engineers during the first two years of the firm's existence. Early on, board members tasked Houston with hiring a reduce manager to help coordinate engineering efforts and prioritize features. Houston reflected: If you ask ten people what a product manager is, you'll get ten different answers. They tend to fall on a continuum with the end points being â€Å"poet† and â€Å"librarian. † A librarian i s focused on blocking and tackling, coordination, and facilitating communication. This type of PM is inherently organized and follows up relentlessly.A poet PM listens to the voice of the customer during usability tests and focus groups and based on that insight formulates an aesthetic vision, a grand strategy, and a product roadman. Our first product manager was 4 more of a librarian than a poet, because we needed a librarian's discipline: even today we don't have enough of that DNA in the company. But he Just drove people nuts. It was painful, but we had to let him go after six months. For the next year, until Drop hired another product manager, the company relied on Houston and Overdose to drive the product roadman.Development proceeded more slowly than Houston had originally expected. In his April 2007 Y Combinatory application, Houston had projected availability of a version that he could charge for thin 8 weeks, but launching Drop to the public actually took 18 months. Houston said, â€Å"As a result of doing a few things well, we left a lot of other things behind. We had no business people, we were terrible at getting mainstream PR, and running fast and loose didn't make for the most predictable engineering organization. 9 Public Launch Drop opened its beta to the public in September 2008 at Outstretched, an annual competition showcasing high-potential startups. Drop was one of 50 startups selected to present at the event from a pool of over 1,000 applicants. ND also provide a product development deadline for the team. Houston mused that since Drop was following a tried-and-true blueprint for launching a consumer Internet service, his next step would have to be devising a marketing plan. Drop retained an online marketing consultant to help with this task.Houston said, â€Å"What do most web companies do? Apply to Outstretched, check. Buy Towards, check. Get real marketing people, check. â€Å"10 Early on, Drop attempted to acquire new customers throu gh paid search advertising. However, incumbents had bid up the cost per click for obvious search keywords. As a result, it cost Drop more than $300 to acquire a paying customer (Exhibit 3). This was not sustainable, since an annual subscription for 50 KGB service was priced at $99. Drop had tweaked its sign-up process to increase the conversation rate from free user to paying customer.The company also experimented with hiding the free service option for visitors who arrived via search ads. Houston recalled, â€Å"Our average acquisition cost per paying customer went from thousands of dollars to hundreds, but we still had a problem with our economics. And we didn't feel good about doing sneaky things to our users to get them to pay. 11 Sequoia Capital and Cell Partners subsequently led a $6 million Series A round of financing in October 2008, but even with additional capital in the bank, relying on paid search would not be a viable long- term option.In addition, the team had experim ented with display ads and affiliate programs, but these efforts also yielded unacceptably high acquisition costs per paying customer. Houston realized that with a fermium strategy, optimization of marketing messages and pricing would be critical to Dropsy's success; consistent with this priority, the company hired an analytics engineer as its eighth employee. Inspired by the Backbone â€Å"growth† team dedicated to user acquisition and engagement, Houston later assigned 30% of engineering resources to optimizing customer acquisition efforts.This team closely tracked metrics across Dropsy's conversion funnel by cohort,a for example: the percent of landing page visitors who registered as free users; the percent of registrants who still were active free users after X months; and the percent of free users who upgraded to paid subscribers after Y months. Houston said, â€Å"We run our business based on the ‘Startup Metrics for Pirates' framework developed by investor Dave McClure. He says firms should a A cohort was a set of prospects or users acquired at the same time and/or via the same marketing method. Closely track metrics around the acquisition of landing page visitors; activation of those visitors into users; retention of users; referral of new visitors by satisfied users; and revenue earned from users. † The team used A/B testing to fine tune page layouts free storage given to users. Analytics showed that gigabytes were not necessarily the best measure of value for Drop users. â€Å"We had all kinds of people paying us for Drop but not even bumping against their quota,† Houston said. Analytics likewise revealed that few users were accessing past versions of their files, all of which-?including deleted files-?were being permanently stored by Drop at a significant and rapidly growing cost. The company modified its policy, offering 30 days of undo history free of charge and making unlimited undo history a premium option. Houston sai d, â€Å"Just a tenth of a percent improvement in conversion rates, or a small decrease in the cost of serving a customer can have a huge impact on profitability. Premium is a spreadsheet game-?one you win with lots and lots of little moves . â€Å"13 Fourteen Months to the EpiphanyDespite improvements through analytics, Houston and his colleagues struggled to make the company marketing programs profitable. Nevertheless, the service grew rapidly, reaching 200,000 users ten days after launch and 1 million users seven months later. The vast majority of these users were acquired through word-of-mouth referrals and viral marketing efforts, rather than paid advertising. A relentless focus on ease of use and reliability had paid dividends in the form of loyal users who encouraged friends, family, and co-workers to try Drop. Houston commented, â€Å"The power of focus can't be understated.If you look at a feature matrix of Drop versus everyone else, we would never come in first. We woul d rather do a few things well rather than present Drop in a confusing way. â€Å"14 To identify ways to improve ease of use, the Drop team tracked support forums closely. Houston said, â€Å"We get feature requests for things we already have. These are particularly bad because it means that even though we've implemented something, our users can't find it. We pay close attention when that happens. â€Å"1 5 The company also maintained a â€Å"Vote† on its site, allowing users to vote and comment on treasures they would like to see added.Since the team gained insight on users' preferences through support forums and the Vote, the company did not conduct regular consumer surveys, but it did conduct occasional usability tests. In one instance, the entire team watched as not one of five typical consumers recruited from Scraggliest could successfully install and interact with the application. Houston recalled: Watching them fail was excruciating. Imagine if your coffee maker Just spit coffee all over the counter every third time you used it or your car stopped in the middle of the road. That's the computer experience for a normal person.The PC is always conspiring against you to lose your stuff or break in some weird way. You have no idea what happened or what you did wrong. Watching those five consumers struggle to try to figure out how to use our product was probably the most painful day we ever had as a team, but afterward, we created a list of 70 things to fix. B A/B tests divided a set of similar individuals into a control group that experienced a status quo product and a test group that experienced a product with one modified element, to determine if the modification yielded a statistically significant DropBox it just works I was searching for a new opportunity that was more Drop client software to a Windows, Mac, or Linux PC or to an phone, pad, Blackberry, or Android mobile device, the software created a local Drop folder for accessing files of any size or type via an encrypted Internet connection from other Drop-enabled devices or from any web browser. The client software tracked changes in real-time to any file in the user's local Drop folder, then instantly synchronized a copy of the file on Dropsy's servers, updating only the portions of he file that had changed, in order to save bandwidth and time.Likewise, within milliseconds, copies of the file were synchronized in local Drop folders on all other devices connected through the user's account. â€Å"We engineered Drop so it just worked, all of the time,† Drew explained, â€Å"We supported all the major operating systems and handled all kinds of obstacles, from flaky wireless connections to corporate firewalls, which was not an easy task. † The company adopted a fermium business model, that is, it offered both free and premium accounts.Users got 2 gigabytes of storage for free and had the option to ay $10 per month for 50 gigabytes or $20 per month for 100 gigabytes. Industry observers estimated that 2% to 3% of Dropsy's users were paying customers, which implied a $10 million to $15 million annual revenue run rate in mid 2010. 1 At that time, the company had 25 employees, most of whom worked in engineering or support functions. Drop had raised $7. 2 million in two rounds of venture capital funding from Sequoia Capital and Cell Partners.Market Overview Drop was a late entrant to the fiercely competitive online backup and storage services space. The first firms in the space, which had small companies as customers, ere launched in the late asses by startups offering outsourced storage at remote decanters. As costs declined, services also became available for consumers seeking to backup their data online. Most ear ly users were technically adept, for example, college students downloading music from peer-to-peer file sharing services.Few firms in this first wave of services survived the dot. Com crash, but by late 2006 the market was crowded again with new competitors. In July 2007, the tech blob Amassable published a list of more than 80 online backup and storage services. 2 Market research vendors like DC fueled the hype by predicting that the worldwide market for online backup services would grow to $71 5 million by 2011. 3 Investor interest in online storage surged when Muzzy was acquired by EMCEE for $76 million in late 2007.Houston was confident that Drop could succeed in the face of intense competition. He reasoned that Drop would be able to collect revenue from some users, because consumers generally understood that storage cost money, whether it came in the form of a physical drive or an online service. When challenged by endure capitalists to explain why the world needed another clou d backup company, Houston asked them, â€Å"How many of those services do you personally use? † The answer from Vs. was almost invariably, â€Å"None of them. 4 Houston asserted that direct experience with rival services, which often failed to transfer data across firewalls and sometimes balked with big files or large numbers of files, was helpful in innovations that contributed to these advantages: 2 The first generation of cloud storage services was based on a simplistic model, where file accesses were redirected over the Internet instead of to your computer's hard rive. Your operating system and all your applications assume that accessing your hard drive is cheap and fast, but when these requests are instead routed to a server thousands of miles away, they can take an order of magnitude longer.This subtle but critical distinction explains why when working remotely, even simple actions like browsing a directory can freeze your computer for seconds at a time. We needed to t ake a completely different approach by storing files locally and updating the cloud copy in the background using a number of time- and vindications optimizations. Launching Drop It's hard to imagine Tom Cruise in Minority Report sending himself files via Gamma or lugging around a USB thumbprint. Ђ? Drew Houston After his frustrating experience on the bus, Houston started working on Drop full time in late 2006. He said: I needed it badly. I worked on multiple desktops and a laptop and could never remember to keep my USB drive with me. I was drowning in email attachments trying to share files for my previous startup. My home desktops power supply literally exploded one day, killing one of my hard drives, and I had no backups. I tried everything I could find but each product inevitably suffered problems with Internet latency, large files, bugs, or Just made me think too much. To help with the project, Houston recruited Rash Overdose, who dropped out of MIT and later became Dropsy's co-founder and chief technology officer. The pair spent the next four months coding a prototype in a tiny Cambridge apartment. With a working prototype in hand, Houston came up with an innovative approach for testing demand for a minimum viable product. He had produced various recruiting videos for his college fraternity; with this know-how he created a three-minute crassest of a product demo and uploaded it to Hacker News, a popular forum for developers. â€Å"l did this out of necessity.There was no way I could ask for people's files before we were 100% sure our code was reliable. But I had a prototype that showed off the product's best features. â€Å"7 Houston used the screens to recruit beta testers and to solicit feedback on features that Drop might include. He added, â€Å"Not launching is painful, but not learning can be fatal. We got a lot of feedback through that video, so we were learning while we were building. † Houston had another reason for posting the video on Hacker News: he hoped to ND selective Y Combinatory seed fund and incubator program.He recalled, â€Å"l had Just submitted my application to Y Combinatory and as a gambit to get their attention, I submitted the video to Hacker News. I hoped it would work. â€Å"8 It did: in April 2007, Drop received $15,000 in funding from Y Combinatory (see Exhibit 1 for excerpts from Dropsy's Y Combinatory application). In exchange for a small percentage of a startup's common equity-?usually 2% to 10%-?Y Combinatory provided up to $20,000 of seed capital as well as mentoring, workspace, and introductions to other advisors ND investors over a three-month period.Many startups applied to Y Combination's program, which had a track record for matching strong technical teams with elite venture capital firms. 3 Upon conclusion of the Y Combinatory program in September 2007, Drop raised $1. 2 million of convertible debt from Sequoia Capital. â€Å"We fit into Sequoia's sweet spot: we were two youn g technical founders, working out of an apartment, targeting a big market. It helped that we were ranked at the top of our Y Combinatory cohort,† Houston recalled.He and Overdose moved to San Francisco to continue building the many, but despite the capital infusion, they continued to run lean. Drop delivered its service through Amazon's SO cloud storage platform, avoiding the need for infrastructure investments and positioning the company to scale rapidly. The co- founders created a private beta program for a limited group of users who registered through a simple landing page. The page contained a short description of Drop and requested an email address from visitors interested in participating in the beta test (Exhibit 2).Houston commented: There's a spectrum of well-informed opinions about when to launch your product. At one end, Paul Graham tells entrepreneurs, â€Å"Launch early and often† to accelerate learning. At the other end, [respected software guru] Joel Spoo ky says, â€Å"Launch when your product doesn't completely suck. † We were managing people's files, and it's a big deal if you lose or ruin them. That meant moving toward Spooky end of the spectrum and keeping our beta test small. Next, Houston devised ways to generate demand for the beta service.In a guerilla marketing move, he produced another short demo video and posted it in March 2008 on Dig, a site that showcased web content deemed popular by Digs users. Houston felt it was essential to communicate in an authentic manner with the tech enthusiasts who frequented Dig. He sprinkled â€Å"Easter eggs† into the video, for example, references to Chocolate Rain (a Youth phenomenon), TIPS reports used in the movie Office Space, Mitt's Gillian Hall, and the 09 IF key for decrypting Blurry disks (dissemination of which, in the face of movie studio legal threats, was a hacker crusade).With this tongue-in- cheek nod to its tech-sway audience, the Drop video soared to the top of Dig, few days. Overnight, the list for Dropsy's private beta Jumped from 5,000 to 75,000 Ames, far exceeding the team's expectations. Building the Company Make something people want. -? Y Combinatory motto Based on consumer response to the second video, it appeared that the promise behind Drop-? â€Å"It Just works†-?resonated with potential early adopters, especially those who were familiar with the performance limitations of existing online backup/ storage services. Houston shifted his focus to product development.The Drop team was comprised almost entirely of engineers during the first two years of the firm's existence. Early on, board members tasked Houston with hiring a reduce manager to help coordinate engineering efforts and prioritize features. Houston reflected: If you ask ten people what a product manager is, you'll get ten different answers. They tend to fall on a continuum with the end points being â€Å"poet† and â€Å"librarian. † A librarian i s focused on blocking and tackling, coordination, and facilitating communication. This type of PM is inherently organized and follows up relentlessly.A poet PM listens to the voice of the customer during usability tests and focus groups and based on that insight formulates an aesthetic vision, a grand strategy, and a product roadman. Our first product manager was 4 more of a librarian than a poet, because we needed a librarian's discipline: even today we don't have enough of that DNA in the company. But he Just drove people nuts. It was painful, but we had to let him go after six months. For the next year, until Drop hired another product manager, the company relied on Houston and Overdose to drive the product roadman.Development proceeded more slowly than Houston had originally expected. In his April 2007 Y Combinatory application, Houston had projected availability of a version that he could charge for thin 8 weeks, but launching Drop to the public actually took 18 months. Houston said, â€Å"As a result of doing a few things well, we left a lot of other things behind. We had no business people, we were terrible at getting mainstream PR, and running fast and loose didn't make for the most predictable engineering organization. 9 Public Launch Drop opened its beta to the public in September 2008 at Outstretched, an annual competition showcasing high-potential startups. Drop was one of 50 startups selected to present at the event from a pool of over 1,000 applicants. ND also provide a product development deadline for the team. Houston mused that since Drop was following a tried-and-true blueprint for launching a consumer Internet service, his next step would have to be devising a marketing plan. Drop retained an online marketing consultant to help with this task.Houston said, â€Å"What do most web companies do? Apply to Outstretched, check. Buy Towards, check. Get real marketing people, check. â€Å"10 Early on, Drop attempted to acquire new customers throu gh paid search advertising. However, incumbents had bid up the cost per click for obvious search keywords. As a result, it cost Drop more than $300 to acquire a paying customer (Exhibit 3). This was not sustainable, since an annual subscription for 50 KGB service was priced at $99. Drop had tweaked its sign-up process to increase the conversation rate from free user to paying customer.The company also experimented with hiding the free service option for visitors who arrived via search ads. Houston recalled, â€Å"Our average acquisition cost per paying customer went from thousands of dollars to hundreds, but we still had a problem with our economics. And we didn't feel good about doing sneaky things to our users to get them to pay. 11 Sequoia Capital and Cell Partners subsequently led a $6 million Series A round of financing in October 2008, but even with additional capital in the bank, relying on paid search would not be a viable long- term option.In addition, the team had experim ented with display ads and affiliate programs, but these efforts also yielded unacceptably high acquisition costs per paying customer. Houston realized that with a fermium strategy, optimization of marketing messages and pricing would be critical to Dropsy's success; consistent with this priority, the company hired an analytics engineer as its eighth employee. Inspired by the Backbone â€Å"growth† team dedicated to user acquisition and engagement, Houston later assigned 30% of engineering resources to optimizing customer acquisition efforts.This team closely tracked metrics across Dropsy's conversion funnel by cohort,a for example: the percent of landing page visitors who registered as free users; the percent of registrants who still were active free users after X months; and the percent of free users who upgraded to paid subscribers after Y months. Houston said, â€Å"We run our business based on the ‘Startup Metrics for Pirates' framework developed by investor Dave McClure. He says firms should a A cohort was a set of prospects or users acquired at the same time and/or via the same marketing method. Closely track metrics around the acquisition of landing page visitors; activation of those visitors into users; retention of users; referral of new visitors by satisfied users; and revenue earned from users. † The team used A/B testing to fine tune page layouts free storage given to users. Analytics showed that gigabytes were not necessarily the best measure of value for Drop users. â€Å"We had all kinds of people paying us for Drop but not even bumping against their quota,† Houston said. Analytics likewise revealed that few users were accessing past versions of their files, all of which-?including deleted files-?were being permanently stored by Drop at a significant and rapidly growing cost. The company modified its policy, offering 30 days of undo history free of charge and making unlimited undo history a premium option. Houston sai d, â€Å"Just a tenth of a percent improvement in conversion rates, or a small decrease in the cost of serving a customer can have a huge impact on profitability. Premium is a spreadsheet game-?one you win with lots and lots of little moves . â€Å"13 Fourteen Months to the EpiphanyDespite improvements through analytics, Houston and his colleagues struggled to make the company marketing programs profitable. Nevertheless, the service grew rapidly, reaching 200,000 users ten days after launch and 1 million users seven months later. The vast majority of these users were acquired through word-of-mouth referrals and viral marketing efforts, rather than paid advertising. A relentless focus on ease of use and reliability had paid dividends in the form of loyal users who encouraged friends, family, and co-workers to try Drop. Houston commented, â€Å"The power of focus can't be understated.If you look at a feature matrix of Drop versus everyone else, we would never come in first. We woul d rather do a few things well rather than present Drop in a confusing way. â€Å"14 To identify ways to improve ease of use, the Drop team tracked support forums closely. Houston said, â€Å"We get feature requests for things we already have. These are particularly bad because it means that even though we've implemented something, our users can't find it. We pay close attention when that happens. â€Å"1 5 The company also maintained a â€Å"Vote† on its site, allowing users to vote and comment on treasures they would like to see added.Since the team gained insight on users' preferences through support forums and the Vote, the company did not conduct regular consumer surveys, but it did conduct occasional usability tests. In one instance, the entire team watched as not one of five typical consumers recruited from Scraggliest could successfully install and interact with the application. Houston recalled: Watching them fail was excruciating. Imagine if your coffee maker Just spit coffee all over the counter every third time you used it or your car stopped in the middle of the road. That's the computer experience for a normal person.The PC is always conspiring against you to lose your stuff or break in some weird way. You have no idea what happened or what you did wrong. Watching those five consumers struggle to try to figure out how to use our product was probably the most painful day we ever had as a team, but afterward, we created a list of 70 things to fix. B A/B tests divided a set of similar individuals into a control group that experienced a status quo product and a test group that experienced a product with one modified element, to determine if the modification yielded a statistically significant

Leisure Industry Competition Essay

1. Discuss using examples from a leisure industry of your choice, the extent to which competition creates efficiency. There are many ways in which a firm or leisure industry can be considered to be efficient. First of all they may be productively efficient. This is where they would be operating at their lowest average cost, meaning they are benefiting from all economies of scales and experience no diseconomies of scale. They particularly must avoid any waste of factors of production. Allocative efficiency exists when the firm is operating where Price is equal to Marginal Cost. When a firm or industry is allocatively efficient this means they are producing what society wants and allocating resources to increase both output and quality. This may be in the form of specialisation. If dynamic efficiency exists this means that the firm or industry is experiencing abnormal profit. Their aim must always be to increase output in the future often by investing in research and development, such firms are often benefitting from monopoly power. Pareto efficiency is where production of one good can increase without the production of another decreasing. I believe that increased competition will create productive efficiency. This is because if there is increased competition through an increase in the supply of for example entertainment channels entering the TV broadcasting industry this will result in firms having the reduce their prices of advertising slots due to the potential fall in the number of viewers. This will mean that they are now price takers in the market and as a result their revenue will decrease. As the firms are profit maximisers they will be unsatisfied with their revenue falling and as a result they will need to reduce their average cost in an attempt to maintain their previous profit level. They will reduce their average cost by avoiding any waste of factors of production in the production of the good/service and in order to do so they will often reduce their output of any new television programmes as there is a potential that they may be unsuccessful and as a result viewers will often see an increase in the numbe r of repeats of television programmes. They will also decrease their output of new programmes in order to stop any potential diseconomies of scale and improve communication in the production of their good/service. Therefore at this point I believe that in  the leisure industry firms such as ITV have become more productively efficient as a result of increased competition. Some firms also have the ability to attain economies of scale. An example would be SKY who obtained technical economies of scale by the introduction of 3D and HD boxes, and purchasing economies of scale by the purchase of previously unavailable channels and programmes such as HBI and the FA cup. Attaining these economies of scale reduced SKYs average cost leading to them being more productively efficient. This further backs up my point that increased competition does result in greater efficiency. However, it could be argued that this is dependent upon the scale of competition. For example, when Channel 4 and Channel 5 first entered the market this was not the case, meaning efficiency did not increase. However, as these channels have become more well established this is now the case. One could also argue that this is also not the case for the BBC due to the fact that they are funded by the Government and do not compete on price. The BBC is a public monopoly but they are certainly not efficient. The BBC is not cutting costs in order to become more productively efficient; the Government is reducing their funding therefore this has created the need for the company to be more productively efficient. They are doing this in a number of ways such as moving production from London to Manchester as it is cheaper and therefore will reduce their costs. Therefore increased competition is not the factor that is causing the BBC to become more productively efficient – Government intervention is. This leads me to the conclusion that the greater the number of firms the more likely they are to increase productive efficiency. But increased competition is not the only factor; government intervention must also be considered. In the leisure industry there is always a need for Travel Agents to be allocatively efficient, this is because it is vital that they produce what society wants. If it was the case that certain Travel agents were not providing the holidays that consumers wanted this would simply result in holiday makers going elsewhere. This is especially the case at present because barriers to entry/exit have decreased meaning new firms are entering the market all of the time due to improved communication. This has increased competition mainly due to the internet as many travel agents and comparison websites have set up online to compare the best deals, which increases the  power to the consumer as they are no longer required to visit the main four travel agents. This has resulted in a greater need for travel agents to avoid mis-allocation of their resources by decreasing the number of planes and destinations. This is because if they do not allocate their holidays to societies needs their Marginal Cost will increase above their price. Therefore increased competition leads to an increase in the need for firms to allocate resources to what society needs and ensure that they are increasing their quality and output to become allocatively efficient. We have established that increased competition will inevitably result in increased output; however it will also increase external costs. For example in eco tourism, if output increases in visits to the rainforest this will cause a major increase in the number of negative externalities. Therefore in this case it would be beneficial to decrease the output of such visits in order to reduce negative externalities. In fact I would argue that a monopoly provider of eco tourism holidays would be the most beneficial for the environment as they might produce holidays at the social optimum level. Taking these factors into consideration I strongly believe that increased competition will force firms to think about how they can allocate resources efficiently but sometimes at a social cost. With SKY benefiting from technical economies of scale it could also be argued that by investing in HD and 3D boxes this has also allowed them to become dynamically efficient as their abnormal profits allow them to invest in research and development which allows them to increase output in the future with the same factors of production inevitably leading to monopoly power. This benefits consumers as they are able to consume greater output in the form of 3D and HD programmes or a wider range of channels in the future without the needed for greater factors of production. However, I could argue that this is not in fact them demonstrating greater efficiency as a result of increased competition but rather creating even more barriers to entry for other firms wishing to compete with them in the broadcasting market. It also could be questioned as to how much of their abnormal profits are actually being invested into research and development as I am aware that the majority of their profits goes to shareholders. Therefore I am led to believe that although theoretically SKYs monopoly power and the lack of competition they  face gives them the opportunity to be dynamically efficient; in reality it is questionable as to what will drive competition in the future. Although it could in fact be more competition that will drive future efficiency and not the abnormal profits of just a few firms. I strongly believe that increased competition is most likely to result in efficiency in the travel market as there are little barriers to entry that current travel agents are able to put up in order to stop competition affecting their profits. This is mostly due to the fact that the internet has allowed many new companies to set up online giving consumers the opportunity to compare prices directly; therefore increasing the need for travel agents to be allocatively efficient making the statement true. However I accept some may argue that if a firm is being allocatively efficient at a social cost they should not be considered to be allocatively efficient and therefore my judgment could be questioned. On the other hand when firms are not competing on price, like for example the BBC, an increase in competition is not likely to result in them becoming more efficient as decreasing their average cost is not likely to be a priority but instead they are more likely to need to increase the quality of their good or service. In theory I believe that the best way to ensure efficiency in the future is to invest in R+D (creating new barriers to entry like SKY) and the way to get firms to do this is increased competition. In reality this may result in negative externalities or potentially abuse of monopoly power and monopolies may often end up being inefficient in the long run.

Google Inc. use of the BCG Matrix Essay Example | Topics and Well Written Essays - 3500 words

Google Inc. use of the BCG Matrix - Essay Example The paper presents an overview of Google and its core businesses, and goes on to undertake a strategic audit of the company making use of the BCG Matrix as well as the SWOT Analysis and the PESTEL analysis in a strategic audit aimed at identifying strategic issues facing the company and at making recommendations to get the company on a path to growth. The paper presents a critical analysis of the main issues that were surfaced in the strategic audit, and also undertakes a critical assessment of the BCG Matrix itself. The critical assessment of the BCG Matrix surveys various perspectives on concept, undertaking a comparison and contrast of those perspectives, and weighing in on the relevance of the BCG Matrix in modern times and in the present context of its use to undertake the strategic audit on Google. This latter exercise also looks at the suitability of the BCG Matrix versus other tools and frameworks for undertaking a strategic audit in general and for undertaking a strategic au dit of Google (Taggart and Harding, 1998; Google, 2013; Reuters, 2013). Finally, the critical audit and the critical assessment of the main issues that were surfaced in that critical audit, together with the critical assessment of the BCG Matrix itself, are all used to come up with strategy recommendations for Google to grow moving forward. ... e from the twin perspectives of concepts and frameworks used on the one hand and Google’s business perspective on the other (Google, 2013; Reuters, 2013; Smith, 2002; Spee and Jarzabkowski, 2009; Ioana, Mirea and Balescu, 2009; Doole and Lowe, 2008, pp. 282-283; Armstrong, 2003; Hall and Saias, 1980, pp. 160-161; Zeithaml and Zeithaml, 1984). II. Company Overview Google Inc. is a technology company that operates on a global scale. The company details itself as a firm that focuses on key business segments and areas of technology, and these revolve around search, hardware products, products for the enterprise, operating systems for mobil e and other computing platforms, and online advertising. Google is present in more than 50 countries and territories, and reaches its audience through the use of 100 different languages around the world. The hardware business is primarily represented by Motorola, which caters to two distinct business segments consisting of the Home segment and the Mobile segment. Mobile is about mobile devices and corollary services and products tied to mobile. Android is the popular mobile computing platform that Google owns and licenses for free to device manufacturers. The Home business segment on the other hand keys in on digital television and the use of related access devices and services. Its Enterprise business consists in the provision of software platforms and services centered on Google Apps, Google Search, Google Maps, Google Earth, and a host of related platforms and cloud-based services that cater to vertical industries such as education, government, and business.

Franchising - marketing Essay Example | Topics and Well Written Essays - 2000 words

Franchising - marketing - Essay Example property rights or inventions or special characteristics of a business owned by the other party (Franchisor) based on payment as determined by the Franchisor for supplying or marketing certain products and/or services. The Franchisor and the Franchisee can be entities or individuals†. The objective of this research is to analyze business scenario in Indonesia and how may it help a franchising business. This paper will examine food & beverages and saloon franchising business in Indonesia and will try to clarify the process and the market scenario in Indonesia. It will try to answer the question that which one of the franchise (food & beverages or saloon) would be more workable in Indonesian market. In particular, this paper will study McDonald’s food & beverages and Tony & Guy’s saloon franchising business model and their suitability to Indonesian market. McDonalds is the worlds largest chain of fast-food restaurants. Hamburgers, chicken, French fries, milkshakes and soft drinks are main items that a McDonald’s offers. More recently, it has also added salads, fruit, snack wraps, and carrot sticks to its menu. McDonalds Corporation has developed a unique franchise business model. In addition to ordinary franchise fees, supplies, and percentage of sales, McDonalds also collects rent, partially linked to sales. As a condition of the franchise agreement, the Corporation owns the properties on which most McDonalds franchises are located (www.mcdonalds.com). TONI&GUY is considered as the most powerful hairdressing brand in the world. The company is constantly evolving artistically and commercially. It offers the best education on the planet and boasts fabulous product ranges and a dynamic and modern image.  Moreover, TONI&GUY is  the only hairdressing company to be awarded Superbrand status and they truly represent the catwalk-to-client philosophy (www.toniguy.com). TONI&GUY offer a lifestyle choice, not just a hairdressing appointment. Within the salons,

ADD and ADHD Behavior Research Paper Example | Topics and Well Written Essays - 1750 words

ADD and ADHD Behavior - Research Paper Example (Hermann et al, 2007).The completely unproven and highly questionable diagnosis known as Attention Deficit Disorder forms the basis of administering dangerous stimulant drugs to millions of children around the world each year. The stimulant drugs are known to modify behavior by compromising human health.Attention Deficit Hyperactivity Disorder is a popular sub type of Attention Deficit Disorder and they are nothing more than inventions which are a result of politics and conflicting world economics.The absurdity of the invented disease is reflected by its absurdity of the diagnostic criteria listed in DSM-IV. Moreover, the proof of the nonexistence of ADD and ADHD is provided by the fact that there are absolutely no physiological or organic findings to substantiate the existence of this invented disease.The symptoms of ADD and ADHD are childhood behaviors, ranging from normal to non-complaint, and these symptoms themselves reflect the non existence of the disease.Despite the fact that the validity of ADD and ADHD is spurious, the number of children and young adults being diagnosed with the invented diseases are skyrocketing.Unfortunately, the number of diseased individuals is rising with the passage of each year.Apart from the rising number cases, another depressing aspect of the disease is that a considerably large number of diagnosed children and young adults are treated by administering dangerous stimulant drugs.... Unfortunately, the absence of intervention in the use of diagnosis and stimulant drugs, the popular and seductive concept of ADD will continue to flourish which will inevitably continue to throw innocent children and young adults into a deep floundering sea of fear and isolation. (Jacobs, 2004). Popularity of ADD & ADHD A staggering number of children and young adults are diagnosed with ADD or ADHD each year. The increased popularity of the invented disease amongst health professionals has resulted in more and more children receiving dangerous stimulant drugs. The paradoxical effect of stimulants on children has been revealed by strenuous clinical studies conducted by clinicians around the world. Unfortunately, the commencement of treatment strategies involving stimulant drugs has not been wavered by the surfacing of paradoxical effect of these drugs on children and young adults. According to health professionals, ADD and ADHD continues into adulthood and is responsible for criminal behaviors. However, such claims have no reality in my opinion because the disease simply has no organic or physiological findings. There is no proof of the existence of the disease therefore; health personnel are unable to justify their claims that adulthood criminal behavior is a consequence of ADD and ADHD in childhood. (Jacobs, 2004). Dangers of Stimulant Drugs Ritalin (methylphenidate) and dexamphetamine are pharmacologically similar to cocaine and are two of the most popular drugs for administration in ADHD. The drugs have significant effects which are similar to the ones mediated by cocaine. The chief effects of stimulant drugs used in the treatment of ADHD and ADD are that they cause the patients undergoing therapy to

MOTOROLA MOBILITY Essay Example | Topics and Well Written Essays - 2000 words

MOTOROLA MOBILITY - Essay Example The decline at Motorola Mobility has been blamed in part to the many number of models that were produced to cater to particular geographical and demographic areas, which was met with limited appeal. In addition, Motorola Mobility shied away from investing in products that were riskier, but more innovative for the long term. According to Iqbal Arshad, who was head of the Droid and RAZR teams, the company saw an increase in commitments from stakeholders who ensured they released at least forty products every year (Gold, 2012: p51). This reduced their ability to focus and seek to make a more lasting innovative difference. Motorola Mobility should seek to cut back drastically on the models that they release, as well as seek to sell directly in only a limited number of countries. The company has to simplify its business in order to focus on specific innovative products. In addition, the company could bring in new engineers to supplement the current ones who know the culture of Motorola Mo bility (Goggin, 2012: p744). In order to reclaim Motorola’s market share, the organization could pitch Motorola Mobility as the underdog start-up of the industry and develop a model that is symbolic of the turnaround. The firm will only get one chance to re-define their product and, therefore, the themes they select must be innovative, viable, and iconic. The new flagship model should also be designed to appeal to a mass market, rather than the more limited target market of the Droid. The company should also improve on its personalization scheme that allows Motorola Mobility device users to customize their products (Goggin, 2012: p744). While it is still in its infancy, the innovative scheme portends one of the organization’s biggest opportunities. The customization process could be enabled as an app or on a website, allowing the customers to request their customized phone remotely from various colors and textures. The customization process should also last for a short er time in order to counter attempts by rivals to pick up on their innovation and differentiate it by making it faster (Goggin, 2012: p745). Finally, this customization scheme should also allow for customization of software, which will require the engineers at the firm to come up with innovative ways to enable this feature. Despite the takeover by Google Inc, it may be prudent to maintain Motorola Mobility as an independent firm that engineers products independently. This would be the best choice for Google Inc that supports other companies on its Android platform and for Motorola Mobility as it will give them the innovative freedom required (Ickin et al, 2012: p51). It is important that the Motorola Mobility brand remains live from the bottom to the top, including in its management. However, running the company as an independent entity may not portend any business advantage to Google Inc as the organization is losing money. Since Google cannot offer early access to Motorola Mobilit y of its Android platform due to its other smartphone partners, it should be left up to the firm to create their own signature product. Having lost money prior to its acquisition, Motorola Mobility should now focus on producing a flagship Motorola product without relying on Google’s Android platform. It is clear that innovation is not a problem for

CLA L10 Essay Example | Topics and Well Written Essays - 500 words

CLA L10 - Essay Example Helen of Troy left her homeland and moved to a new land with a male Paris. Medea crossed boundaries with Jason. Paris takes Helen from her husband Menelaus and travels from Sparta to Troy with her. This abduction causes the Trojan War. The contest between the goddesses and the judgment of Paris points out the cause of Helen’s abduction; Aphrodite promises to Paris that he could have Helen as a prize (Steiner, 2011). By traveling to Troy, Helen abandoned her home, her husband, and her child and broken the social boundaries of marriage. The result is disastrous for Trojans and Greeks, ten years of war, involving bloodshed and suffering, to bring Helen home from Troy. Helen’s movement destroys all Trojan husbands and perverts the wedding rituals of the Trojan women. Medea is a maiden who leaves her homeland willingly to travel over geographical boundaries to aid her hero that she fell in love with on her quests. She helps Jason to win the Golden Fleece. In Colchis. Aphrodite influenced Medeas falling in love with Jason. Medea betrays her father Aeetes and aids Jason. Like Helen, Medea is influenced by the gods. Aphrodite influences their decision to cross boundaries. Hera convinces Aphrodite to make Medea fall in love with Jason so that Jason can obtain Fleece, as Hera’s motive to eventually ruin Pelias for dishonoring her. Like Helen’s act of crossing boundaries, Medea’s traveling with Jason was also characterized by bloodshed. Medea and Helen’s movement to new lands results in the death of others. Medea murdered her brother Apsyrtus. While traveling from Colchis on the Argo, Medea aided the voyagers by killing Talos. In Iolchus, Medea kills the ruler of the city, which she is foreign to and destroys family bonds. When Jason forsakes Medea in Corinth, she kills both the princess and her father Creon in vengeance. Medea is cruelly smart than Helen and goes

Liberal Democracy Fostering Development Essay Example | Topics and Well Written Essays - 2250 words

Liberal Democracy Fostering Development - Essay Example This report declares that the civil societies are useful in fostering development. They are responsible for setting the priorities of the most vulnerable in the society. With liberal democracy, according to Sen, civil societies can play their roles effectively. Democracy will allow civil societies expand their choices in the way they make the needs of the most vulnerable people in the society know. This will enable the vulnerable individuals in the society to promote their freedom from poverty, fear, and violence. Sen’s argument is that, with democracy, there would be a climate where people can complain, speak out and argue. There would be promotion of transparency. Things will we be happening in the government and individuals will be aware of. This paper makes a conclusion that from Sen's perspective, liberal democracy such as the focus on rights has proven to be important. However, in some cases such as China and South Korea, this is not the case. The most important thing to note is how liberal democracy can foster development. For example, in developing countries that are democratic, how has democracy assisted the people both socially and economically? There is a need for more participation by people in movements that advocate change of political and economic system. This paper partially agrees with Sen’s views that liberal democracy fosters development, economically, either politically or socially. Nonetheless, there is growing attack on liberal democracy because it does not allow participation and co-operation at its centre.

Ethical Decision Making Essay Example for Free

Ethical Decision Making Essay Ethics are important in business and the leader has important role in ethical decision making. A success leader is who has the courage to build his or her company to meet the needs of all the stakeholders, and who recognizes the importance of the service to society. The common theme for the leader play in ethical decision making is trust, fairness, and transparency. First, trust is based on ethical behavior of firm to form a strong base of any long-term business. Thus, leaders must act what they believe based on their strong value of religion, education, and family. Secondly, ethics refer to the fairness for making any decision or adjustment. Therefore, leaders should consider would their decision be fair for everyone affected by it before any action taken. Finally, it is important in such a way that is easy for others to see what actions are performed. Leader with well transparency would be happy to make the decision in public, especially to the people affected by it. Making the ethical decision is the duty of ethical leaders to instill these principles and face its sequential challenges. Business leaders must energize employees at all levels, utilizing a comprehensive set of methods to promote and recognize ethical actions. What must be in place for ethical decision making to occur in a business? In business, ethics is an essential configuration of leadership. The leader needs to make ethical decision when the business operators make competitive, strategic and tactical decisions that affect both stockholders and stakeholders such as downsizing and outsourcing. According to â€Å"How leader can be ethical role models† article, 79 percent of teens surveyed said they felt prepared to make ethical decisions when they enter the workforce. However, 38 percent said it is sometimes necessary to cheat, steal, lie or behave violently to succeed. Many leaders are now torn between company profits and doing the right thing. They are also torn between doing what is right for the company long-term and what is good for their careers in the short-term.

Assignment 1 Trends in the Workplace Essay Example for Free

Assignment 1 Trends in the Workplace Essay Predict three (3) human resource functions that are likely to be affected by the implementation of an MRP system. Propose two (2) ways in which you as a human resource manager can help the organization carry out this change successfully. As material resource planning (MRP) involves the initiation of the automation of planning needs for resources, ordering materials, and scheduling tasks to be completed on the shop floor; it is to be expected that certain functions of human resources will be directly affected with the implementation of the MRP system. The first of these would be job analysis which is the process of getting detailed information about the job and job design which involves defining the way work will be performed and the tasks involved in completing those requirements. Obviously the shift from manual process to automation will change the standards for certain task requirements and necessitate the assessment of standards of performance. This leads directly to the affectation of a second human resource function of training and development. Training and development will become a priority as the MRP system will require dedicated orientation to introduce the systems to the employees. This will need to be a well planned undertaking for information, disclosure and inquiry response. Skill development will also need to be provided to prepare the users of the new systems for the task the implementing of automated systems can cause unrest in a business setting so it is important that employee relations and communications be kept transparent making this the third human resource function to be affected as the MRP system is implemented. Two ways in which human resource managers should be prepared to implement this change successfully is to first be fully vested in the resource that is human capital. Human resource managers should be prepared to identify those individuals who have the skill set to complete the transition for the prescribed tasks by clearly stating the task, its objectives and setting realistic goals and attainment periods. Secondly, human resource managers are to make sure the employees progress matches the goals that have been set forth. This is performance management and is critical in a transitional period. Determine three (3) human resource skills that would be important for success in leveraging the new MRP system. An undertaking of the magnitude of the MRP transition will require the use of many human resource management skills. The most important of these skills is the ability to effectively communicate. This includes written communication skills, oral communication skills and both verbal and non verbal skills and active listening can be included here as well. Critical thinking will be needed to make decisions for situations that may arise during the transition as well. Lastly, a strong sense of judgment and decision making abilities will be required. There will no doubt be times human resource managers may be called upon to make instant decisions or implement changes in an effort to complete the transition as complex issues arise. These times will require an aggressive approach to meet the quality and standards of the business. Based on the planned growth of the organization, predict three (3) factors that might impact the organization’s ability to hire new employees that possess the technical skills needed to perform a job. One factor that may have an impact the organizations ability to hire new employees that possess the desired technical skills for the performance of a job is initially recognizing the need to hire or promote a current vacancy. A second factor is determining the relevance of the current job description and whether it is in full alignment with the now automated position. This might require a simple review of the current job analysis paying close attention to the level of skill required for completing the task. Finally, a clear identification of the duties and responsibilities should be presented in order to solicit an eligible workforce. . References Essentials of human resource management. S. Tyson. Elsevier. 2008. 464. Human resource management: contemporary approach. Textbook. J. Beardwell, T. Claydon. Pearson. 2010. 710 p. Whitehill. A. M. Japanese management: tradition and transition. Publisher, Routledge, 1991.