Intro

I didn’t write a post summarizing everything that happened to my last startup, LinkLarry, but after reading YouCastr’s post-mortem I thought it made a lot of sense to review my experience with ShuffleChat. After all, I did start this blog to share my experiences and lessons learned through entrepreneurship. This Fall I intend on sticking to a routine and posting useful content weekly. But who knows, maybe my next venture will render me completely captivated.

Anyways, to make up for my lack of posting lately, here comes a long one… be warned.

Summary Of What Happened

I started ShuffleChat with my college roommate six months ago. It was our first night of spring semester when he showed me a new website he discovered over the winter break. He was ecstatic about things people were doing on the site; people were being very creative. It was called Chatroulette.com, and after spending a couple hours on the website we both realized we were in a position to make something better.

I’m an Internet & tech guy and my roommate is a marketing & sales guy; we had a lot of complementary skills. We foresaw the site and the social medium it created taking off. As we predicted, a couple months later the trend we spotted reached its tipping point and received major press such as NYTimes, CNN, WashingtonPost, just to name a few. This was the peak of the random video chat meme.

One of our main objectives with ShuffleChat was to clean up the experience. Chatroulette had (and still has) major issues with user nudity and other obscenities. I just checked the site while writing this and saw a guy masturbating the first time I clicked next. People can’t stay on the site for more than a few minutes without witnessing this first hand. We figured by just offering a cleaner alternative we could get enough users and innovate from there.

ShuffleChat took longer than we expected to launch for a few reasons. We started out building our own chat application from scratch, but this turned out to be a disaster. Things weren’t going well and time was of the essence so I quickly implemented an alternative in a matter of a week, pulling all-nighters like it was my business.

Unfortunately, this was an out-of-the-box piece of software and those who made our launch night in April can attest to the software just barely working. People could chat, but disconnections were frequent among other issues. In retrospect we rushed might have rushed it, but then again we pushed our launch date several times and no one knew how long the window of opportunity would stay open. We did succeed on our primary objective though, we had zero reports of inappropriate behavior; mainly because we were very selective in our marketing campaigns.

We shut the site down temporarily while I fixed the software issues and so we could focus on the marketing challenge, the larger elephant in the room in my opinion. We still needed thousands of more people to come to the site before it became it’s own traffic engine.

Shutting Down – The Reasons

Marketing/User logistics

Anyone that has tried chatroulette knows that it isn’t so much ‘random’ video chat as it is ‘speed’ video chat. People take one look at you and decide whether or not to move on. The average male will be “nexted” about a dozen times before having the chance to have a conversation. This environment creates a huge requirement for users.

For example, let’s say we wanted 100 people online at all times- 50 two-way conversations. Since it’s essentially speed dating people by what they look like, people will go through everyone else online within a matter of minutes. With an average time online per person of 7-10 minutes, it equates to ~600 people/hour, or over 10K people/day or over 300K/month. That’s an enormous amount of traffic, which usually takes months to build and it still wouldn’t even be enough.

In this case, chatroulette had the ultimate first-mover advantage; it started an entirely new social medium. Simply, the incredible amount of users required to jump start an alternative website is the number one issue every competitor had. Less than a handful of sites out of hundreds overcame this barrier to entry, and the ones that did mostly leveraged existing website assets (they already had traffic to refer).

Turned out to be a fad/meme

Chatroulette peaked with their press in March. It’s estimated that since then the site’s traffic has decreased by around half its peak. Having studied the market for so long it makes complete sense why this would turn out to be a fad. My co-founder and I understood this risk when we started, but we also felt we could innovate the service to decrease the fad effect. This is what Andrey Ternovskiy, the founder of chatroulette, is trying to do now.

For example, one of the ways I planned to innovate the medium was to focus on quality engagements between users. I wanted to eliminate the large amount of time people spent waiting to find a good connection. I planned to do this through increasing relevance between users.

I won’t get into all the features and algorithms I planned, because overall accomplishing this objective would lead to an exponentially higher user requirement. When there’s already an incredible challenge to get enough users, increasing the requirement exponentially would completely outweigh the benefit of better service.

Revenue Model?

Eliminating the inappropriate behavior would definitely have gotten us in the room with advertisers, but ultimately relying on ads is a very risky venture because if the concept (most of which are untested) doesn’t pan out you’ll never get the chance to work with ads. Making a product/service that someone is willing to pay for is so much better (less risky). For starters, it focuses you on solving a problem/need- which is absolutely critical in traditional entrepreneurship.

Throughout my research for alternative applications of ShuffleChat I found some better revenue models, but none of which created an all around good opportunity for a business. I kind of have set high standards for myself since I’ve done so many things. I see the value in taking a lot of initiatives, because eventually you’ll come across the right way to make a light bulb. Personally though, I’d rather jump the curve and make fiber optics, or a laser, something cooler than a light bulb.

404: Passion Not Found

I’ve accepted the fact that I’m an introvert. My co-founder is the exact opposite and that’s why our partnership worked; we complemented each other in many ways. However, in the end I’m NOT the type of person that would go on everyday to use our service like he would. While it may not be the most significant factor, it’s definitely better for the entrepreneur to be crazy about using their own product.

What I Learned

Focus on your exclusive role

I think we could have made more progress if my co-founder and I both focused on exclusive roles. If I didn’t help out so much on the marketing campaigns, such as the promotional videos, I would have had more time to ensure the tech wouldn’t glitch or fail. If he didn’t spend so much time on product development with me, we might have gotten enough users to the site to relaunch with a better version.

Be Pragmatic, Don’t over-complicate things

We wasted a lot of time focusing things that didn’t matter. For example we easily spent a couple weeks on promotional videos that ended up not even being used for a variety of reasons. We also wasted a lot of time planning every feature possibly imaginable. I myself spent way too much time preparing a Drupal site that could do things we wouldn’t need for another few months. This is a lesson I keep getting pounded into me: don’t fantasize about your product/service too much.

Don’t get feature crazy. Get it built -> Launch -> Listen to customers, then fantasize/brainstorm and iterate.

Keep the big picture in mind

In the beginning we both reminded each other we were in a race and that every single day mattered. We both worked our asses off, all while doing full course loads. However, in regards to effectiveness, I wish we implemented weekly meetings from the start to reflect on the bigger picture and avoid spinning our wheels. I definitely think the 80/20 rule applies here. 80% of what we worked on had an extremely small impact on the success of the startup.

Ask yourself right now, what things am I doing or plan to do that are not absolutely critical? In the big picture of things, are these things absolutely necessary? If not, stop them. Put it on hold. Focus on the most critical components in the early stage of your startup. The luxury of doing non-critical tasks can be afforded when you’re profitable.

Track EVERYTHING from the START

While I did setup Google Analytics and configured most of our marketing campaigns, I didn’t realized until later that there were some important factors that I wished I tracked from the start. For example, there were some interesting Facebook campaigns that I wished we tracked separately to understand the difference in their effectiveness.

Plan Plan Plan

I’m biased, because I love to plan, but from my experience with ShuffleChat, planning saved us many times, and would have saved us many more times if we valued it more. When done right, planning can help you be pragmatic. It’s a little different when you’re in an extremely time sensitive startup, but there’s always a balance to be had.

It really comes down to how you plan (the execution); planning can help you avoid mistakes or useless work, but it can also paralyze you and send you in the wrong direction sometimes. Achieve a balance.

Be an expert on your customer

Along with an emphasis on planning, I think it’s critical entrepreneurs master their customer. If you don’t know exactly what your customer wants, needs, likes, feels, dreams, hates you are shooting in the dark with assumptions. Market research is so important, and it’s best done by talking to people… LOTS of people.

You don’t need college, it just helps

So I finished my first year at the top entrepreneurship school in the country, completing their renowned FME program, only to find that I learned 3x as much working on my own startup than I did in all my classes combined. In entrepreneurship learning by doing is exponentially more effective. Disclaimer: I’m sure if I was the CEO of my FME company I would had a completely different experience. So I guess I should rephrase it to: learning by doing something you want is exponentially more effective. However, I’ll be posting more on my thoughts on education in the future.

It definitely depends upon the person, but I think if you have enough passion, determination, and Internet access, anything is possible. It’s all about becoming self-sufficient in my opinion.

Before I end though on the topic of college and my experience so far with Babson, I have to say that living in the E-Tower has completely made my college experience. Living entrepreneurship with 20 other hardcore entrepreneurs has been life changing. If you know you’re an entrepreneur, start networking with others like you, and find a way to live with them. Surround yourself with great people. 3am ideas by yourself is no where near as fun.

Moving Forward

Throughout the summer I worked on pivoting ShuffleChat in Babson’s Summer Venture Program. I went into the program with a plan that got torn to shreds by week 2 and went on to research and plan a ton of new applications, mostly centered around video and video chat. In my own terms I feel I made a lot of progress.

However, I truly feel this project has run its course and it’s time to officially shut it down so I can get my head and decision making away from it’s constraints. In closing, I’m glad I went after it, and if I could do the last 6+ months over again the same way I would (minus the stress, obsession, and mistakes).

The good news is that I have plenty of ideas that I’m looking into for my next startup. Some video related, some not. Also, in the past I turned down a few projects for Websites Unleashed, so I plan to take up new work on that front and sharpen my marketing skills before I commit to a new venture. I’m looking forward to applying more of what I’ve learned in Internet marketing, social media, and blogging over these last few years.

I also plan on going through my giant backlog of startup reading material. My Amazon Wishlist is currently over 60 books, and I still have half a dozen in a box waiting to be consumed. I love reading up on anything that might help me in business.

Well, I hope you enjoyed my lengthy post and got something out of it. I feel I have much more to say, but it’ll have to wait for future posts.

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