We’ve been doing a lot of research and debate on what exactly our business model for tutorspree should be. We haven’t quite hit on what our perfect mix is just yet, but I can feel the way our ideas have evolved and gotten better and better (with a special thanks to John Laramie and Dan Osit for throwing some really good ideas and challenges at us).

In any case, one of the questions we’ve been pushing around is the idea of a subscription fee for access to our tutors and to the premium content we’re going to create over the long term. There are, of course, markets in which there is near perfect parity between supply and demand (though I’m not quite sure where they are). However, when you look at certain markets, you notice that there is a high degree of asymmetry between the seekers and sought. That type of market is a perfect place to create a subscription service for a few reasons:

1. the sought items (ok, fine, the supply) is a limited, precious, quantity that deserves a premium.
2. knowing the scarcity of the “good” item, buyers are more than willing to pay a premium for access.
3. the number of transactions that will actually occur is likely equal to some fraction of the total users on the site. Charging a subscription provides a method to monetize the entire customer base rather than just the individual transactions occurring - which may be rare.

This third piece is especially important for marketplaces based around non-commoditized items. An hour of freelancer time or something equivalent cannot simply be produced on demand. Rather, once that time is committed, it cannot be recovered (you can’t just make more). That means that your “sought item” is not only limited, but it is cyclically self-eliminating. It actually takes itself offline for periods of time, further reducing your supply. So dealing with transaction only based fees puts you at a potential disadvantage to your optimal model - you’d be losing out on the actual “thickness” of the likely larger side of your market.

It’s strange to think of it this way, but when only one side of your market is visible (the freelancers or tutors), the other side could very well be four, five, or ten times it’s size. If you don’t monetize that potential, you are likely leaving a lot on the table.

At the end of the day, though, the monetization model you choose has to be based around the actual dynamics of your market. If you realize that the average demand side player engages in two transactions a month for a net gain of $30 for you (with a transaction based model), then you can view that as the break-even against which to judge a possible subscription. If you can make more than that by charging a monthly fee, and you are providing enough value to your customers to make it worth their while, then go for it. If not, then a transaction fee might be a better path.

In any case, this is really just the product of my own exploration of these ideas. I’d love to hear some thoughts from people who have poked through these questions at more length. In the meantime, I’ll go back to bouncing between excel models and front end work.

Last week, I received a new printer for the tutorspree offices that was broken out of the box. So I called tigerdirect to complain and have it repaired/replaced. The process thus far has led to a couple of inefficiencies that should not exist - which makes them really annoying.

1. Finding customer service on the tigerdirect site is pointlessly difficult…it gets lost in all the clutter, and even if you find it, the “livechat” option doesn’t seem to actually work
2. This is the bigger issue: tigerdirect has to schedule a pickup for me. I’m not lugging this thing over to the UPS store. Instead of having UPS call me to schedule a pick up, I’ve discovered that UPS will make three “pickup attempts.” I guess if they’re in the neighborhood, they’ll stop by? That’s more than slightly ridiculous. UPS stops by my building almost every day, and they have yet to come upstairs. Moreover, when I called UPS, they had no record of the request for pickup. So I called tigerdirect again and asked them to schedule again and…we’ll see what happens.

UPS stridently claims to love logistics. That seems to be true based on how great most of my experiences with them are. But this is a real breakpoint. Their logistics are only as those of the companies making use of them, and, right now, I’m having a frustrating experience and blaming it on both companies. Rationally or not, I don’t disassociate the two services. As a consumer, I have a single experience, and I judge all parties on the quality of that overall experience.

Which is a critical lesson for someone starting a company built around independent contractors carrying out services assigned through our site. Those interactions have to be good from the start, and have to continue to be good. The feedback loops we’re building for tutorspree are critical for that. Our community needs to see us actively and constantly evaluating the people we list on our site, and has to see us weeding out the bad apples. At the same time, bad interactions that do occur (and they will, sometimes great people just don’t get along) need to be confronted head on so that both parties understand the how, the why, and are willing to keep using us despite them.

I’m not entirely sure how to pull that off just yet, though I’m sure we’ll learn over time. I know it’s more than screening and more than feedback and more than UI. It’s all those things together plus a mentality and a fluency with our customers. We have to proactively anticipate their needs and head them off and then circle back with them every time those needs are not met.

That’s one hell of a large challenge, and it will be a massive component in our success or failure. Suggestions on how to approach that are always appreciated.

The New York Times is undoubtedly one of my favorite websites. Say what you will about the widely available content on the web, the Times is my paper of record for news, culture, and opinion. It’s been that way for a long time. It’s the first paper I check in the morning, and it’s my first favorite in the chrome launch window.

Which is why what the Times has started to do is so painful. I first noticed the changes a few months ago. Previously discreet video ads moved to the top of the page. Then they started expanding at will. I was never sure when clicking the “next” button in a story would lead to the interjection of a full page ad or an ajaxy video ad that expands itself across my window. The tactics being used are alarmingly similar to those used in the bad old days of pop ups (which most of us never see anymore thanks to built in pop up blocking technology).

I was, however, willing to put up with these problems. They aren’t great for my experience, but fine. Recently, however, the Times has really started to get on my nerves. They’ve begun to split articles up onto multiple pages for no particularly good reason. The standard length of a movie review was a single page. Now they stretch to two and three pages. Sometimes the final page is a single paragraph followed by rating information. Sometimes they slap more on. The message, though, is clear: we want you clicking internal links as many times as possible so that we have the opportunity to show you more ads.

And that is decidedly uncool to regular users of the site. It creates a suboptimal interaction where I begin to resent the ways in which I am forced to navigate on the page. And yet, I see why the Times is doing it. I know that they are being forced into increasingly desperate revenue generation tactics by the collapsing newspaper industry. Rupert Murdoch has begun throwing up paywalls all over the internet, whereas the Times is just trying to get me to look at more ads. For now, I’m willing to make that trade, but I wonder how far ahead the breaking point actually is. At what point have you degraded the customer experience enough that they will go to the paywall version? Is that an acceptable strategy? Would you achieve high levels of conversion? Would that be worth the damage to brand?

I have no idea how those dynamics play out in the long run, but I’d be curious to see it. It seems like it would lead to a Pyrrhic victory, but, at this point, I don’t know that newspapers can hope for anything better.

PS - I’ve consciously avoided discussing the bizarrely asynchronous design of the Times site. Why should Business Day and the Opinions section be structured in fundamentally different ways than the rest of the site. I’ve counted four different navigation bars across the site, which really does fly in the face of consistency and user familiarity. It feels almost as if they’re trying to make the user confused and annoyed.

Entrepreneurs get really excited about their ideas. We want to talk about all the cool things we’re doing, and we want to talk about it all the time. That’s great. That’s the enthusiasm that drives us, but it also leads to one of the worst ideas in sales: telling everyone what you’re doing.

Now, before you think I’m going to start advocating stealthiness, hear me out. Take a breath: think about all the product pitches you’ve given, and all the pitches you’ve heard. Which ones actually made you think they had a shot? Were they the pitches that focused on the specific UI features of a new site, or the details of an as yet unrevealed algorithm? If you’ve heard enough pitches, my guess is that that’s not your leading bullish indicator.

In my experience, the kicker comes when I tell people why I’m doing what I’m doing. tutorspree isn’t exciting because we’re going to have a feedback mechanism as a central feature of our marketplace, it’s exciting because we’re doing it because our customers need a better way to parse an overly complex and opaque system. It’s interesting because we’ve taken the time to understand what our customer base looks like and what they want. It’s interesting because we’ve thought about it.

And at the end of the day, that’s what people want to hear. Chances are incredibly high that you’re going to pivot away from whatever cool feature set you’ve already built. What you need to demonstrate in the minute or hour you have with a new contact is that you and your team have the ability to think your way through problems and adjust course as necessary. It’s your thinking that people are going to invest in, not whatever product version you have for them today (though being able to show them that product is how you show that you can do a lot more than just think, but that’s another story entirely).

So, by all means, get excited about your new super awesome html5 implementation, but contextualize it. Lead with why you need html5 to expand into a new customer demographic. Put you and your thought process front and center, because that’s what makes it your company, that’s how it got where it is, and that’s what will drive where it goes.

Con Ed invited customers to join a project called JumpStart which would help me track my own energy usage with the assistance of an electricity meter, and lower costs with tips and advice. I’ve always been a fan of more data (well, really, of synthesized information, but you need to start somewhere), and this seems like just the kind of thing that could help me save some bank and maybe help people do their part to save the world. I love when companies figure out ways to align interests with customers - I want to save money, they want to reduce stress on the grid, and we both get to talk about how we’re doing good things for the environment.

I’ll let you know how it goes. I’ve copied the email below.

I was told that finding a CTO/technical co-founder in NYC was about as easy as climbing Everest with one leg, no O2, and carrying a dead elephant. Honestly, I like a good challenge, and doing impossible things has a certain allure to it. But this was…daunting.

Today, though, we did it, and I wanted to share that experience in tribute to how awesome the scene in NYC is right now, to all the people I met along the way, and to give a little bit of advice to other folks looking to climb the same mountain.

Starting at the beginning

Three months ago, Josh and I started knocking around the idea that grew into tutorspree. As the idea took shape, we faced a couple of problems: 1) We did not have the expertise to build a product ourselves 2) We did not know whether or not we were solving a real problem. Having just finished Steve Blank’s Four Steps to the Epiphany I was dead set on answering the second question first. Before we went off and spent money to either hire a developer or pay a shop to build something, I wanted to make sure that we would have a market that wanted what we were doing and would pay for it once we actually delivered. Besides, we needed to know exactly which features were necessary now, and which could be tacked on later.

Skipping ahead a bit

Suffice it to say that we spent much of the last few months on customer development, a topic which merits its own post, and at which I think we’ve done a decent job. About a month and change ago, we realized that we really did have a viable idea for a product, and that it was time to find the partner to help build it.

At that point, I shifted a major part of my time to tech specific networking, as did Josh. We emailed every person we knew who was even ancillarily involved in technology, I put up a job post on this blog, I started working my way through specific job boards that I thought would have the kind of people I wanted. I sent out hundreds of emails, and had coffee with dozens of people. I handed out a whole bunch of business cards, and got rejected time and time again. So how did we end up succeeding?

Know what you need, what you want, and who can tell you you found them

I learned a lot about interviewing back in the land of finance. Most important lesson I received came from my boss, Pawel, who took me to task for bringing a candidate in for a loosely defined position. He hammered me for not knowing exactly what qualities I was looking for and for not nailing down exactly who could tell me if the candidate had them. So Josh and I talked to my friend Jon Thornton, who is one of the brains behind ParkWhiz, about what exactly we needed. We knew we needed a crackerjack web developer, and could probably do without a guy who dreams in COBOL. Jon helped us refine that profile, and was good enough to offer to help us interview people.

This is critical: If you don’t have someone to run candidates through a tech interview, get one. We had two. Jon was able to assess web dev expertise for us, while my brother (also Jon) interviewed folks from a pure CS perspective (he actually does dream in code).

Get your pitch right

Remember that the developer you want to hire most likely does not think the way venture capital thinks, or the way that your customers think. You need to approach them the way you would a wounded bear - confident, cautious, and holding the right enticements. When it came time to put together our job posting, I ran it by developer friends, like Matt Insler. He gave me input on what would and would not attract attention. I practiced my “dev” pitch, and Josh and I gave a lot of thought to what we wanted to offer in terms of compensation. We were well aware that it would be a mix of cash and equity, and that there was no golden number for either.

Also, remember this: just because developers like to think about code first does not mean that they don’t like/have a head for business. Ideas are cheap, ideas that can make money are a bit pricier, and ideas which you’ve already proved have a willing market are even better. Every developer I met mentioned that they were surprised with the lengths to which we’d already gone to validate a customer base and business model, and it’s one of the key things that got them excited about working for us.

Talk, talk, talk…now listen

Every time I met someone new who might be interested, I probed how deep that interest went, figured out why they were interested, and tried to understand if they were a good fit. That led to a lot of conversations, and, in a lot of cases, led to understanding that that person was not a fit. If that feeling was mutual, I pushed for another introduction to friends that might be interested. I also asked every single person I met with to point out the flaws I had missed, to tell me what they thought we should do for technology, and how best to get there. All the talking I did was really just a way to get to that bit where I got incredible advice. Even people that weren’t actually interested in joining had amazing thoughts on how to make tutorspree better.

Big net = big fish

And each conversation I had spread my net out a little bit farther. I was mining 3rd and 4th order connections to find interesting people, and was discovering a whole lot of talent outside of the usual tech meetup afterparty. I learned to look for developers where they like to hang out - we went to hackers/founders events and watched their twitter stream, talked to the folks at hirelite, dug through HNHackers, sat at coffee shops and started talking to the guys with their heads down eclipse, and just generally pushed everywhere we could.

And people responded.

Good interviews have good structure

As I said above, you need to know the qualities you are looking for, and you need to work through them in an orderly way. Each person we interviewed went through a similar process. Prior to contact, we googled/linkedin/checked twitter and blogs. We then contacted the people we liked and conducted an initial phone screen or cup of coffee to gauge interest or basic fit. A conversation with the team member that hand’t yet met that person. If fit checked out, we did technical interviews, and if those went well, another fit conversation. If all that cleared, we started talking to references to challenge or verify our picture and what we’ve learned. If your candidate makes it through those steps…you may very well have a winner.

So let’s recap

1) You have a valid idea, and you’ve done your homework to prove it

2) You have a clear picture of the person you need

3) You line up the resources to assess the qualities you need

4) You go to where the hackers are, and you speak to them in a language they understand

5) You interview consistently, repeatably

6) You repeat steps 4 & 5 until you find the right person.

And then you succeed

Ryan Bednar, welcome to tutorspree.