Growth5 Blog

Wednesday, October 28, 2009

An eCommerce Experiment: Pay What You Want

On the one year anniversary of World of Goo, the popular physics-based puzzle game, the game's developers decided to let consumers pay whatever amount they wanted (the hugely successful game's retail price is normally $20). A minimum of one cent was required. The experiment was to last from October 13 - 19.

After seven days of the "pay what you want experiment", the developers posted this blog. Initial data:
1. Sales increased dramatically due to the coverage the experiment received in the media and blog universe.

2. 57,000 people bought the game for an average price of $2.03 ($116k).

3. 13% of the seven day revenue went to PayPal as their transaction fees increase the lower the price of an item is. On transactions of 30 cents or less, PayPal kept the full amount.

4. Almost 17,000 of the purchases (30%) were for one cent. 40% of all purchases were less than a dollar.

5. The developers saw a dramatic increase in sales of their other full-priced games due to site traffic.
In the October 19th post, the developers announced they would be keeping the "pay what you want pricing" going for another six days. This past Monday, they posted this update on the two week experiment:
6.After two weeks -- 83,250 birthday copies were sold for an average price of $3.25 ($271k). Not a bad two weeks.

7. The developers attribute the Week Two sale price jumping by almost $1.00 to their Week One post announcing that so many people were only paying $.01 and that they received nothing for purchases of $.30 or less.

8. Linux users paid the highest average price - just over $3.50. Windows users paid the lowest average price - just under $2.00. Linux users commented that they are appreciative of any developers who take the time to develop for them. Windows users, I suspect, have limited funds due to constantly replacing sledgehammer-smashed computers.

9. The developers created the following "generosity" table by taking the average sale price of each country and normalizing that amount by using the country's per capita GDP. They admit the "normalization" model is flawed, but the table is interesting nonetheless.


Thanks Sean Carton for emailing this story.

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Monday, October 26, 2009

Lee Kuan Yew: Due Diligence on America

I was catching up on Charlie Rose episodes this weekend. I recommend you watch this fascinating interview with the former Prime Minister of Singapore, Lee Kuan Yew. He served as Prime Minister from 1959-1990 and is now "Minister Mentor" to the current prime minister, his son. [Part 1 of the interview is embedded below].

Lee, 86, has no shortage of detractors and for good reason. However, what was refreshing about this interview was to hear the perspective of the global world order from a (non-US) Far East expert.

It was also a bit sobering to realize that part of Lee's trip to the US includes performing due diligence on the US economy to decide whether or not the Singapore Sovereign Wealth Fund should be investing more in the US or pulling assets out.

Here are some comments from Lee that caught my attention:

The competitive advantage of the US over other countries, specifically China:
"It’s not just American talent that gets you here. You’re just 300 million people and they have 1,300 million and very many more able people.

But you are attracting all the adventurous minds from all over the world and embracing them, and they become part of your team.

Now I don’t see two million Indians and half a million other peoples, Japanese, Koreans, and others, becoming part of China. I mean, first the language is so difficult. Secondly, the culture is not embracing. How do you fit in?"
China's growth vs. the US economy:
"Even in three decades it won’t reach its full strength. In three decades its per capita is still about one-third of America.

For it to reach America’s standard of living and standard of technology will take more than 100 years."
Due diligence on the US economy:
"...the United States at the moment is in somewhat of an unstable state. Is the dollar going to decline? Yes, it is cheap, but supposing you buy and the deficits grow and Ben Bernanke is unable, your federal chairman, is unable to draw enough liquidity out of the market and you have hyperinflation. Wow. You go down and you lost money...

But what the world wants to know, or what the thinking part of the banking and financial world wants to know, is that the Americans and administration and the Congress, both Republicans and Democrats, have the will to take tough measures to put this right, even if it’s not going to be done overnight but it’s moving in that direction and its going to put it right...

You take health care. It’s not going to be done at the same price, surely. You’re covering 40 million extra people. So where’s the money coming from? If the world sees you’re not making any provisions for that, you’re not letting it go. And the world says this looks as if the elected leaders have lost their will to confront the people with the truth."
The US changing their mindset about China:
"For the Americans, you have got to cease to think in terms of the Chinese as they are today. The Chinese as they are today are people who have been suffering for a very long time, especially under Mao, and who feel that the world is cruel to them. And therefore they’re very edgy.

They are -- if you talk to Chinese leaders now, those over 60, they are with Russian as their second language. In 20, 25 years time, they’re going to meet a generation who are now in the lower ranks who have been to America and Britain and Europe and will be English-speaking and have different models in their minds.

And they will know that they’re not going to be the sole power in the world. Not ever again, because this is a globalized world, and they know that they’re dependent on the world for their growth."
Why bringing China into the WTO was a good idea:
"...if you turn them down, all they will do is they’ll reverse engineer all your patents and you find generic products, imitations on the market.

If you bring them in, get them to observe the rules...they are going to have to observe the rules, and they will... because they’re making patents of their own now.

You have to make sure that they understand membership requires certainly obligations, and the obligations start with responsibility."
Afghanistan / Iraq:
"I think trying to make a country out of Afghanistan is a distraction. There was no country for the last 30, 40 years. There’s just been fighting each other since the last king was chased out... How on earth are you going to put these little bits together? It’s not possible.

"I’m not in expert, but in my simple mind it strikes me that you won in Iraq, you won in Afghanistan not because you fought the Taliban, but because you got the Northern Alliance to fight them, and you provided the Northern Alliance with intelligence and the capabilities to bomb them and target them. And they captured the south."

Charlie Rose: "Yes, but they have governance problems other there, too."

Lee: "That’s all right. But that’s their problem. Why do you want to make it your problem?"
Lee's most significant change in his way of thinking over the last 20 years:
"That the impossible can happen. I never thought the Soviet Union would implode so easily, and I never thought the Chinese would abandon the communist system and move into the free market so readily. It was unthinkable 20 years ago.

Both have happened. The world has changed."
Lee points out that China is enormously curious and ambitious. Rose asks him if the US needs to encourage them:
"No, you don’t have to encourage them. You just have to understand that they are -- look, they don’t want to be an honorary member of the west, unlike Russia. They’re quite happy to be Chinese and to remain as such.

So when you tell them you ought to do this or you ought to do that, they say yes, thank you. And in the back of their minds, we have lasted 5,000 years. Have you?"
Um, not quite that many, no.

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Friday, October 23, 2009

Cross-Workbook Reference in Google Docs

Last Friday we talked about how to scrape data from the web into your Google Doc. Another feature Google Docs has added that is really helpful, is the ability to pull data from one Google Doc to another - a feature that we heavily rely on in Excel.

The formula to accomplish this is:

=ImportRange(spreadsheet_key, sheet!range)

1. The spreadsheet_key is the long string of characters following "key=" in the url of the Google doc you would like to pull data from. For example: if the url of your Google Doc is as follows, the spreadsheet_key is the part of the url highlighted in blue.

2. The sheet!range is the cell or cells of the Google Doc you are pulling data from that you want to import into your active Google doc. For example, if you want to pull cells A1, B1 & C1, from "sheet1" of another Google Doc, the 2nd part of the formula would look like this:


3. The full formula would look like this:

=ImportRange(0ArfzO9kiLDtFcHJhWkdOLVROQ2YtUG44WkM5S2pQR1E&hl=en, sheet1!A1:C1)

The data in the three cells you imported will then appear in the cell you put the formula in, and the two cells to the right of it.

4. If I am pulling data from more than one Google Doc, I list the "key" for each of the docs in A1, A2, A3, etc... of one of the worksheets and then put the cell range of that Google Doc I want to import in B1, B2, B3, etc... by doing so, it allows me to simplify the ImportRange formula to this:


Note: In order to use ImportRange, you need to have been added as a viewer or collaborator to the spreadsheet from which ImportRange is pulling the data. Otherwise, you'll get this error: "#REF! error: The requested spreadsheet key, sheet title, or cell range was not found."

You can read more about the ImportRange formula here.


Tuesday, October 20, 2009

Google Wave Explained

Sean Cohen emails me now and then with interesting articles, blog posts, etc... His emails are proof that "passed links" from those you know have a much higher click thru rate than any other links that are put in front of us throughout the day. The digital "word of mouth" is at least as effective as when the human race used to talk to each other. Remember that?

Sean's email this morning included this post from - an excellent explanation of what Google Wave is for. Some highlights:

There are countless pundits and other tech gurus describing Google Wave as a disappointment, lately. Most of that seems to come from the fact that nobody seems to get what Wave is for. So they compare it to social media.

Is Wave the next Twitter? Nope. Is it the next Facebook? Nope. Is it going to replace Instant Messengers? Possibly, in some circumstances, but not any time soon.

I believe this is partly Google’s fault: they released Wave to geeks and hackers and social media folks first. But Wave is not a geek/hacker tool, or a social media tool, it’s a corporate tool that solves work problems... The way Google should have advertised Wave is: “it solves the problems with email”.

Tenner identifies the following problems with email and explains how Wave solves these issues, check out his post for the details.
1. Collaborating on a piece of text
2. Adding new people to the conversation
3. Keeping added people added
4. Attaching files
5. Lost attachments
6. Multiple conversation branches
7. Small corrections
8. Email to IM to Email


Friday, October 16, 2009

Scraping the Web With Google Docs

Do you use Google Docs? We do - for everything. We use the "spreadsheet" functionality for budgeting, projections, time tracking, element inventory, project traffic, etc... The "Word" functionality for editing legal documents, writing marketing text and other materials.

Why is it so great? A number of reasons, but the main one is that you can have multiple people looking at the same Google Doc online at the same time from anywhere in the world, editing that document and seeing the updates of each other's work in real time.

Plus, the functionality that Google keeps updating is increasingly phenomenal. Example: one of the functions I really like is =GoogleFinance("symbol"; "attribute"). You can insert this formula into your Google Doc spreadsheet and embed stock data that will update continuously (about a 20 minute delay). We use this to publish data on "comparable" companies to our portfolio firms that can be a quick reference for anyone in the field. Google docs can be published to the web so they can be shared with anyone who has the url (they don't need to log-in to Google Docs) or the docs can be shared with just the people you want to see it.

Google realized that even with a formula like GoogleFinance, they wouldn't be able to cover all the data that someone might need, so they created a number of formulas that scrape the web. One that I am using a lot these days is called ImportHTML. This formula allows you to point to any web page and pull data from that page.

Our portfolio company, Vaccinogen, has a colon cancer vaccine currently available in Switzerland - the product is priced in Swiss Francs. GoogleFinance doesn't cover currency rates, so I use ImportHTML to grab the exchange rate for Swiss Francs (CHF) compared to the US Dollar. Once I have the exchange rate, I multiply that rate by the Swiss sales price for the vaccine to figure out what the price of the vaccine is that day in US Dollars. I saved a bookmark for this Google Doc on the home screen of my iPhone so with one click I can have the price any time I need it.

Here's how it works. To get this exchange rate, you could go to and type in "USDCHF" and this is what would be returned.

If I want to import the "Bid" price from into my Google Doc spreadsheet, I can enter the following formula:


I have highlighted the last three numbers of this formula in different colors because they are the most important.

1: this number indicates to use the first table that is found on the result page.

8: this number indicates to use the 8th row of that table.

2: this number indicates to use the second column of that table.

The resulting number in the Google Doc would be the most recent bid price of 1.02. Of course, if ever changes the way their data is displayed, or the url that is used to retrieve this data, you might have to update your Google Doc, but thankfully, these type of pages don't change that often.

Did you know you can pull data from one Google Doc spreadsheet to another? I will post about that some time next week.

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Wednesday, October 14, 2009

Greg's Race Ended in the Emergency Room (Not a Checkpoint)

All of us at the Five Group congratulate our buddy Greg on the money he raised for Baltimore's Our Daily Bread in the Endless Mountains 1240k.

Here's what Greg had to say about the experience:
A dozen days ago, I was standing by the side of the road in the middle of the night in the middle of Pennsylvania, with 625 miles behind me, 150 miles to go ... and a broken rib.

I was thinking about you and all the other folks who were supporting me in the Endless Mountains bicycle race around Eastern Pennsylvania -- and I was hoping that you wouldn't feel too let down that I finished in the Emergency Room instead of the Hampton Inn in Quakerstown, as I had planned.

Since then, I've had a chance to reflect on the experience (it was a great one) and the lessons I learned. I have attached those lessons (link to pdf below), if you're interested in the gory details (and a few good photos by my friends Bill Beck and Maile Neel). But my favorite summary of the ride can be found in this short video by Bill.

The good news is, thanks to your generosity and many others, we managed to raise about $8,000 for Our Daily Bread. That will help a lot of homeless folks find food, shelter and a new start in life. In my book, that makes it all worthwhile! Thank you!

Best, Greg
I highly recommend you read Greg's "Lessons Learned" from his race experience. You can read or download the pdf here. It's also embedded below.

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Monday, October 12, 2009

The Next Big Party: Mobile Marketing & The Six Big Trends Changing Everything

Sean Carton put together two excellent pieces over the last week.

A) In today's ClickZ article, Sean covers Mobile Marketing: Eleven Lessons Learned From Search; and

B) In a presentation to PR professionals last week, Sean went over the Six Big Trends Changing Everything.

The highlights of each:
A. The Next Big Party: Mobile Marketing - Eleven Lessons Learned From Search

The mobile ad market is predicted to grow from $160 million in 2008 to as high as $3.1 billion in 2013. Effective mobile marketing is going to be about search. If you're going to attend this next big party, Sean put together these party rules for you:
  1. Don't charge admission: search must be free.
  2. Don't trick your guests: be predictable, give them the party they came for.
  3. Give your guests choices: advertisers need enough choices to match their specific goals to the product they are offering.
  4. Have good security: keep spammers and scammers out.
  5. Tailor your food and drink to your guests: advertisers need choices, so will your users, try to keep them both happy.
  6. Don't make your guests think too much: keep it simple, this is a party - no one wants to have to think - make it comfortable.
  7. Let people have the kind of fun they want to have -- within limits: having an open API has allowed Google to expand and has created many innovations. Mobile marketing will need to be as open.
  8. Similarly, if your friends want to help, let them! Let people get involved, like Google with Adwords and Blogger. For mobile marketing to work, it must expand out beyond the search engine.
  9. Don't be evil: respect advertisers and users, treat them fairly and openly.
  10. Remember, people are at your party to have fun: mobile advertisers need to remember the context of mobile search - people are on the go and need quick and useful information. Display ads just get in the way, especially the ones that hover over content. Integrate ads in a way that won't annoy users.
  11. Be helpful, considerate and don't interrupt.

B. The Six Big Trends Changing Everything (presentation link & embedded slides below)
  1. The consumer is in control
  2. The move from atoms to bits
  3. Moving from real time to MY time
  4. The end of centralization
  5. The future is always on
  6. The end of the desktop
Sean will be presenting The Six Big Trends Changing Everything at the Five Group Speaker Series event on Thursday, October 22nd from 4 pm - 7 pm. Details here. If you would like to get on the invite list, click on the "Contact Us" link to the right and get us your email.

Sean's PRSA Teleseminar Presentation.

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Thursday, October 8, 2009

Loss Analysis

A couple of months ago, we posted about how to turn capital raise rejection into a positive. This article from Entrepreneur Corner -- Win When You Lose - 10 Guidelines for Loss Analysis -- focuses on the same theme. Whether you lose a sale, a deal, financing, etc... here are 10 excellent guidelines for next steps so you can use the loss to your advantage:

1. Interview internally and externally - Loss analysis doesn’t mean the sales representative, or even your sales leader, writes up their perspective of the deal. Interview the appropriate sales representative, but more importantly interview the customer, being sure to identify (and contact) both the business and technical points of contact at the customer.

2. Choose an objective individual to conduct the interview – It’s difficult for the sales representative for the deal to conduct an objective interview. I have seen interviews conducted by the Product Manager, the VP of Sales, a consultant - and in some early stage companies, even the CEO. The key is you want the customer to feel open to speak about why they did not select your solution.

3. Don’t wait too long - The closer you conduct the interview to the conclusion of the deal, the better. You are asking the customer to give up their time to better understand the reasons of their decision. They are more likely to do this if it is seen as a part of the natural conclusion of the deal. If you wait too long it may seem like you are simply trying to get back into the deal.

4. Understand the customer need - Begin by understanding why they were talking to you in the first place. Did they have a budgeted project before they were talking to you? What need were they trying to address?

5. Get their perspective on your product - In what ways did your product meet their primary need and where was it lacking? Discuss with them their perceptions of your key strengths and weaknesses. Identify product gaps as well as areas where you might be able to communicate better about your product’s true capabilities.

6. Get pricing feedback - Start by understanding what they had originally budgeted to meet their identified need. Was your pricing too high? Did the competition beat your price? How are they evaluating the return they expect on their investment.

7. Get competitive insights - Spend time discussing the competitive products they looked at. They may not be able to give much information, but you will be surprised at how much they will reveal about how other products differ from your own including features, pricing and marketing.

8. Review their key decision criteria - Spend the time to understand the key criteria they used to make their decision. This should provide a good view into how to market your products better as well as guide your product roadmap.

9. Evaluate the sales process - Did they receive all the materials they needed to make their decision? Are there sales tools that could have helped the deal - like ROI calculators, case studies or better customer references?

10. Review the effectiveness of your marketing - What publications or blogs do they read? What shows do they regularly attend? Were they looking for materials that weren’t available? Would more product documentation or case studies have helped? What was their impression of the website?

Winning is great, but you're not always going to be on the winning side. Why you lost is some of the most important information you can receive.

I particularly like 4, 5 and 6 above. Understanding why someone chose to include you is critical as well, something you're doing got you in the door, find out more so you can improve on that factor.

How we think we are promoting our message, our brand, our products is not always how they are being perceived by our audience. Find out where the disconnects are and fix them. You'll be that much better the next time you go out.

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Tuesday, October 6, 2009

Hunch Gets Smarter The More You Use It

You should check out - "Hunch helps you make decisions and gets smarter the more you use it." The idea behind Hunch is to use crowdsourcing to create decision trees that in theory will get better as more good data is entered, thus creating a virtual expert.

Chris Dixon posted about Hunch, and how it can be used to answer the question, "Which VC firm should I pitch?" The highlights:
1. Topics are completely user generated. Topics= "decisions trees."

2. Results are "trained" to be associated with answers to questions. Users "teach" Hunch what to believe about these topics.

3. Users who find mistakes can just click and fix them, similar to how you fix things on Wikipedia.

4. If you don’t like Hunch’s Q&A process you can jump directly to the See All page, and then using the filters on the left to drill down.

5. If you are not logged into Hunch, the results you see will be ranked by their popularity amongst all Hunch users. Hunch personalizes the rankings specifically for you if you create an account and answer “Teach Hunch About You” questions.

6. Hunch has statistically significant data (over 40M user feedbacks total) in most of their 5,000 topics.

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Friday, October 2, 2009

Where In Pennsylvania is Greg Conderacci?

On Wednesday, we blogged about our Chief Marketing Officer, Greg Conderacci, and the start of his 775-mile bike marathon to raise money for Baltimore's Our Daily Bread Employment Center.

Greg hopes to complete the 775 miles in 90 hours of riding time over four days. Here's how he's doing so far:

Day 1: Wednesday, September 30th
Departed Quakertown, PA 4:00 AM
Arrived Hallstead, PA 7:22 PM
15:22 of riding time, 208 miles
13.54 mph/avg

Day 2: Thursday, October 1st
Departed Hallstead, PA 1:55 AM
Arrived Lamar, PA 9:25 PM
19:30 of riding time, 216 miles (424 total)
11.08 mph/avg for the day: lots of climbing, 40 degree temperatures and rain

As of end of day Thursday, Greg had ridden 424 miles in 34 hours and 52 minutes (12.16 mph avg.)

Greg got back on his bike in Lamar, PA at 4:10 AM this morning. I'm beginning to realize that whatever amount we sponsored Greg per mile was not nearly enough!

Photo credit: Endless Mountains 1240km blog

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