Sachin Rekhi

As many of you know, I have been a huge fan of Google App Engine. I love the vision and truly believe its the first real platform-as-a-service as opposed to the other dominant cloud platform Amazon AWS. While AWS has significantly moved the industry forward with on-demand virtualized instances and cloud storage, it has not developed a fully scalable runtime environment comparable to Google App Engine. Sure Google App Engine only supports a very restricted use case and set of technologies, but constraints can be liberating. If the scenario fits for your web app, the freedom to focus on your app and not on infrastructure and scaling is very compelling.

Thus far I've created a variety of small production apps on app engine, including this blog, TuneChimp, and MonkeySort. I am now in the process of embarking on a large project and have been planning on using Google App Engine for it. However, I have run into a variety of shortcomings in GAE that currently and for the foreseeable future seem insurmountable. It has led me to have to reconsider my platform choice for this project and at this point relying on Amazon AWS (or an alternative cloud platform) seems like the ideal option.

For those also considering building applications on top of Google App Engine, I wanted to discuss these shortcomings so that you can make an informed decision when making your own platform choice.

Several months ago I had the opportunity to sit in on a guest lecture Clara Shih gave at the Stanford Seminar on People, Computers, and Design. Clara has spent the last several years at Salesforce leading their social networking product strategy as well as developed Faceconnector, the first business app on Facebook that made it easy to integrate Facebook profile data into Salesforce CRM tools. With this insight, Clara recently authored The Facebook Era, a look at how social networks have changed people's behaviors, expectations, and relationships, and the resulting business opportunities it has created.

After attending the seminar, I decided to read the book and wanted to share some of the key trends discussed and the business opportunities that arise from them.

In a departure from my usual focus on startups, I thought I would take a moment to reflect on my most recent experience in jury duty.

I was selected as one of twelve jurors for a murder trial against a defendant who was accused of beating up his girlfriend and throwing her out of her apartment window in San Francisco in 2005. After an intense 2 week trial and jury deliberation, we today found the defendant guilty. His punishment is still to be determined.

This was my first experience with jury duty and the criminal trial process and I must say I was impressed with the court proceedings and the overall fairness of the trial. I've included my specific thoughts on the jury selection process, the burden of proof standard, and the trial timeline.

Andrew Chen asked me to write a guest post on his blog about some of my experiences monetizing music at imeem. I wanted to share it here as well.

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Introduction
In its search to find the most effective way to monetize user’s time spent listening to music, imeem has become one of the early innovators in the nascent online audio advertising space.

From the process of designing, testing, and iterating on imeem’s unique audio ad product, I wanted to highlight 5 key lessons learned that are applicable not only in developing imeem’s ad offering, but in general to designing any innovative ad product.

Lesson 1: Align the ad product with your site’s user experience
Lesson 2: The easy way is often not the best
Lesson 3: Pick the right metrics to optimize
Lesson 4: Make sure to look at qualitative feedback
Lesson 5: Iterate on the sell in addition to the ad product

1. Align the ad product with your site’s user experience
imeem had classically employed a variety of advertising strategies to monetize users, including display ad inventory that was filled by our direct sales team through high impact brand campaigns as well as dozens of ad networks we used to fill our glut of remnant inventory. Yet we knew with our audio consumption experience, we were creating a new kind of available ad inventory which could be much more effective at reaching our users than display ads since audio-based advertising better aligned with the activity users were most engaged with on the site. With terrestrial radio ads still generating $21B in revenue, there was clearly an opportunity to shift some of those dollars online and provide a better experience for both users and advertisers.

2. The easy way is often not the best
Online audio ads are not a new concept. They have been used by a variety of major online streaming outlets, including AOL Radio, CBS Radio, Live 365, and Yahoo LaunchCast. However, the initial incarnation of audio ads took the easy way out. They typically ran 30 second audio ad spots which they obtained from ad agencies that re-purposed their terrestrial radio creative for online audio ads. This made it very easy for agencies to get their feet wet with online audio advertising with no additional creative costs. While this may work for traditional online streaming services, the new generation of music streamers like imeem, Last.FM, and Pandora would not be willing to run such long audio ads out of fear of losing their user base.

So what was needed was an audio ad unit custom tailored for personalized streaming services. And that’s what we ended up creating at imeem. We came up with an 8 second audio ad spot that would advertise a national brand and show a standard IAB medium rectangle (300×250) banner on top of the player during the audio ad playback. The user could click-through the medium rectangle to the advertiser’s landing page like classic banner ads. We started with a very low frequency of a maximum of 2 ads per user per hour. However, this was far from easy, as it required imeem to develop in-house production capabilities for the 8 second audio creative, as agencies never had existing creative and were rarely willing to develop another set of creative themselves. While this was an undertaking, it is often necessary to bear the cost of innovation to deliver the right ad product to your audience.

3. Pick the right metrics to optimize
In order to understand the effectiveness of any ad unit, it’s important to systematically test it. The first step in designing a successful experiment was determining what were the metrics that we were testing. We knew that we were trying to satisfy two customer segments with this ad product: advertisers and users. For advertisers, there were a variety of ad-related performance metrics that we could measure. However, we decided to start by measuring the advertiser metrics that ad agencies had classically been most interested in. We wanted to determine whether we could make advertisers happy through the performance of these classic metrics, since trying to educate ad agencies on the importance of new metrics is an uphill battle that would significantly decrease your ability to sell the unit. Thus the initial advertiser metrics we tracked were click-through rate of the tethered medium rectangle banner as well as aided and un-aided brand recall as measured through quantitative surveys administered by our research partner Dynamic Logic.

For users, what we wanted to understand was whether introducing audio ads onto our site would decrease the amount they used the site. While we tracked page views, visits, session length, etc, we focused on number of songs played per user during the life of the experiment as the most important proxy for site usage.

4. Make sure to look at qualitative feedback
In addition to measuring quantitative metrics, it’s equally important to collect qualitative feedback from real users. The iModerate online focus groups we conducted ended up being very enlightening and allowed us to derive interesting insights of consumer motivations and behaviors that looking at the quantitative data alone wouldn’t provide.

For example, though initially we were significantly worried that the introduction of audio ads would cause users to flock to our ad-free competitors, we learned through interviews that many of our young users had developed a strong affinity with imeem, understood the need for imeem to monetize, and were eager to suggest ad verticals they would be most interested in hearing to improve the product.

5. Iterate on the sell in addition to the ad product
An area that’s as important to iterate on as the ad product itself is how you sell or position this offering in the marketplace. Selling innovative ad products is actually the greatest challenge in the process. Anytime you introduce a new ad unit, significant education is required for brand marketers and agencies to help them to understand the importance, effectiveness, and promise of this new medium.

Our sales planning team iterated many times on the pitch to advertisers for the audio ad product as well as how we reported on ad unit performance at the end of each campaign. This was regularly refined based on feedback we elicited from our advertising partners.

Conclusion
While many have claimed the death of online advertising in light of the recession, its important to remind ourselves that ad dollars are still being spent online. Now is an opportunity to innovate on the ad products that we offer advertisers to show greater value, brand awareness, and performance. We must keep in mind that ad agencies are eager to find better ways to spend ad dollars, as they are equally interested in showing results to their brand clients to hold on to their ad budgets. We should partner with our advertisers and users to find the most efficient way to leverage online advertising to monetize our sites.

As today marks my first day as an Entrepreneur-in-Residence at Trinity Ventures, I'm spending a lot of time thinking about how to formalize my process for starting a new venture. Every startup goes through phases including brainstorming ideas, selecting evaluation criteria, performing due diligence on top ideas, picking a winner, deciding on a corporate structure, putting together the team, evaluating funding options, and more. While the popular press often glamorizes the startup story as an epiphany moment from an opportunistic individual that grows to a successful corporate behemoth, I prefer a much more systematic approach to entrepreneurship (and life in general, for that matter). As I begin this journey myself, I thought I'd document my new venture process along the way, share it with all of you, and hopefully hear from you on your own thoughts.

Winners from the Mochis Award Show @ Flash Gaming Summit
On Sunday I had the opportunity to attend Flash Gaming Summit, the first annual conference dedicated to flash game development organized by my fiancee Ada Chen from Mochi Media.

What's often most exciting for me about events like these is hearing different metrics tidbits from the speakers who are knee deep in the space. This conference was no exception, with a variety of different stats shared throughout the day. I've summarized some of the highlights below.

As more and more offer providers enter the incentivized CPA and direct payments space, there is a clear need for a way to easily test different offer providers and optimize between them.

At imeem, I was responsible for evaluating, signing up, testing, and optimizing the various offer and direct payment providers that were leveraged as part of the imeem points virtual economy. I learned valuable techniques and lessons that I thought I would share with all of you as every day I see more interesting startups jumping on the virtual currency bandwagon.

While I am a big believer that entrepreneurs should spend the majority of their time focusing on getting a quality product to market, one piece of overhead that should never be overlooked is incorporating or forming an LLC prior to product launch. To some this is obvious. Of course you setup your corporate structure before anything else. But to hackers and hobby programmers this may not be their first instinct. Sometimes you have a hobby website that just starts taking off and you never planned on it being a real business. But then it starts to become one and you may not have the protections incorporation affords.

Before moving on to a new phase in my career, I always like to reflect on the previous experience and put together key takeaways that I can leverage in the next opportunity.

It's that time again as this past Wednesday was my last day at imeem. As some of you know, imeem acquired Anywhere.FM at the end of 2007. Since then I've helped to migrate Anywhere.FM, develop the imeem Media Platform, and contribute to a variety of monetization projects. But now I'm eager to move on to the next adventure :)

Since I have a blog this time around, I thought I would share my lessons learned from imeem with all of you.

I'm often asked about my Y Combinator experience so I thought I would take the time to blog about it. I did Y Combinator the Summer of 2007 in Boston with two awesome co-founders. We built Anywhere.FM, a web music player that brought an iTunes-like experience to the web, and eventually sold it to imeem.

So what is Y Combinator? Y Combinator is a new kind of seed stage venture firm. While they provide financing and advice like all venture investors, their model for doing so is very different. They give small amounts of cash (<$20,000), take small amounts of equity (<10%), and fund startups in batches twice a year. These summer and winter batches bring all the entrepreneurs in a given batch together in Silicon Valley for 3 months to have each startup build a demo-able product to show off to investors at the culminating Investor Day in hopes or raising a follow-on angel or VC round.

I would break down the value of the Y Combinator experience into four main benefits: jump starting the startup process, access to a fraternity of entrepreneurs, investor day, and funding.