The Upsider

South By Southwest is a curious place. I have never seen so many people, ideas, and technologies all converge on one place like they did in Austin in early March. There are literally thousands of people, events, and brands all rolled up into one long weekend that is way more than one person can completely grasp. Because of this, it is extremely hard to choose the top takeaway points. But I’ll try.

There are still unique ideas out there. For brands, SXSW is all about getting noticed. But that’s becoming a paradox: how do you get noticed when there are so many brands there? You’ve got to be unique (offer what no one else does), you’ve got to be convenient (with so many distractions, many attendees won’t go out of their way), and you’ve got to be valuable (handing out flyers doesn’t cut it). I think the biggest winner this year was American Express. Hot on the heels of announcing their Twitter integration program, the credit card company offered free tickets to a Jay-Z concert to those who added their Twitter account to their card. This made many cardholders happy (and many others, like myself, want an AmEx card).

Another SXSW winner (that didn’t have to pay Jay-Z) was Chevy. Downtown Austin is beyond crowded during the conference and walking between venues can take some time. Chevy saw that need and sent a fleet of heavily-branded cars and drivers to act as a free taxi service. Hailing a car was easy (if they didn’t already have a passenger), completely free, and extremely useful. An additional benefit for Chevy was getting people into their newest cars, hopefully making an impact for those who are car shopping in the near future.

Ambient (or passive) location is the future. A recurring theme at SXSW was the discussion of ambient location applications. Brief intro: Active location interfaces like Foursquare check-ins or Facebook location tagging require the user to tell the software where they are (or actively allow their phone to do so). Ambient (passive) location interfaces like Highlight, Foursquare Radar, or Geoloqi are always on, reporting your location to the service in order to provide something of value. Many sessions at SXSW focused on the progress of these ambient location services. One of the most buzzed-about product launches at SXSW was that of Highlight, an app that lets you know about the people around you in order to facilitate networking. While the perceived usefulness of this app varies from person to person, it shows what is possible with ambient location.

One of the keynote speakers was Amber Case of Geoloqi, a technology that allows you to set up geofences and create location-based triggers. Much of her talk focused on the potential of ambient location services: in the future, your house will turn on the lights when you pull in the driveway, your car will unlock its doors and start the ignition when you walk up to it, and you will be able to look at the Wikipedia article for locations that are near you, just by pulling out your phone. Much of this technology already exists, and it will become more and more useful in the years to come. In a session with Dennis Crowley, the Fourquare co-founder and CEO discussed his vision for his company’s new Radar functionality. The only limitation right now is the hardware. The GPS sensors in today’s smartphones take a toll on the battery, but as battery life improves in the next few years, ambient location technologies will begin to thrive.

We can do anything. My biggest takeaway from SXSW does not come from any specific examples, but rather the experience of the entire conference mixed up and viewed from a distance. We are living in a world in which the phones in our pockets are more powerful than nearly all computers a few short years ago. A generation ago, the personal computer was just being born. Today, nearly all the information in the world can be accessed from nearly anywhere in the world. Technology is growing at an exponential rate, and we are the beneficiaries of it. As the saying goes: “If you can dream it, you can do it.” Never has this been more true.

If you see a problem or a need and you know how to fix it, the obstacles are lower than they ever have been before. It may take money, but there are people who will pay it. It may take programming skills, but there are plenty of great programmers out there. It may take time, but that’s a small sacrifice. Ben Milne hated credit card fees, so he started Dwolla to change it. Dennis Crowley wanted to see what his friends thought about different restaurants, so he built Foursquare. Phil Libin wanted to make a tool that acted as an external brain and remembered everything for you, so he created Evernote. Jonathan Stark wanted to see what people would do if he bought them all coffee, so he shared his Starbucks card with the world. Chris Radcliff loves space and the space program and wanted to meet others who do, so he started the SpaceUp “unconference” and met other through Twitter. SXSW is full of these stories. Regular people with motivation can create something awesome. If there is anything out there that you care passionately about, do it. It’s the perfect time.

Presenters: Dennis Crowley, Foursquare; MG Siegler, TechCrunch. SXSW event page.

Foursquare has a great future ahead of it, according to CEO Dennis Crowley. TechCrunch’s MG Siegler interviewed the co-founder of the startup that famously launched at SXSW 2009. Three years later, Siegler began by asking about the launch. “We thought we were going to be embarrassed,” Crowley replied. “We were literally coding on the plane to Austin.”

Since its launch, Foursquare has grown to nearly 20 million users, with many checking in every day. Crowley dismissed Google Latitude which, it has been announced, has more users: “If you have Foursquare on your phone, it is because you want it there.” (Latitude comes preinstalled on all Android phones.) He also commented on the recently defunct Gowalla, saying Gowalla was great but seemed to be more of a toy. “This has to make people’s lives’ better. It has to be useful.”

Foursquare presents value in the form of tips from other users. Crowley sees this as crucial to the company’s future. Because of the combination of knowing who their users’ friends are, users’ check-in habits, and tips that are left on the many locations in Foursquare’s database, the company can become a very powerful recommendation engine.  In fact, Foursquare has seen an interesting trend in users that never check-in. They simply read tips on the locations around them. Foursquare recently introduced a new recommendations feature: Radar. Radar is a passive location tool that buzzes your phone when you walk past something Foursquare believes you will find interesting. However, this feature does have one downside: the always-on nature requires the phone GPS to be constantly activated. This drains the devices battery much more quickly, and Crowley admits that many will not use this feature until the hardware improves.

Much of the talk focused on Foursquare moving away from gamification, an aspect that has been present since the beginning of Foursquare. Crowley said that badges and points will not be going away, but they will be enhanced. For example, Foursquare recently introduced badge levels like 5x Jetsetter or 2x Pizzaiolo and Crowley mentioned that Foursquare will rely on these to determine your expertise, potentially weighting your tips and showing new users what users with more expertise are saying. In order to put more focus on tips and lists, two of the more underused features, Foursquare will be releasing a new, redesigned app in the near future.

It was very interesting to hear Crowley discuss the future of Foursquare. If they can use the tips and information that users have submitted along with the behavioral information of where and how ofter users check in, Foursquare should be very successful for a long time.

Presenters: Ben Milne, Dwolla; Bo Fishback, Zaarly; Jeff Slobotski, Silicon Prairie News. SXSW event page.

The Midwest is serving as a home for many technology startups these days, and in this session, Slobotski chatted with Dwolla’s Milne and Zaarly’s Fishback about growing their business in the “Silicon Prairie”.

Dwolla, a credit card alternative based in Des Moines, was started because Milne was sick of paying credit card fees. Dwolla was released in late 2009 within Iowa (because regulations did not allow them to do business outside of the state at the time) and found a user base in Des Moines and surrounding communities. Dwolla has 20 employees: 18 are in Des Moines and two are in Kansas City.

Zaarly is an online marketplace that functions like Craigslist in reverse. Users list what they want and how much they will pay for it. Fishback pitched the idea at a Los Angeles Startup Weekend and quit his job the next Monday to pursue it. After less than one year of operation, Zaarly has 40 employees: 25 of which are based in San Francisco and the rest are all around the country. (Kansas City has another major Zaarly office.)

Both Milne and Fishback emphasized that there are extremely talented people in the Midwest. Milne mentioned that he has considered moving Dwolla, but he is staying in Des Moines because that is where his programmers live. He said without these “brains” there is no Dwolla. Both admitted, however, that all the venture capital is on the coasts. Fishback said that finding local investors is tough, and Milne said “there is no way that we cannot connect with San Francisco and New York” and that he specifically found investors who did not mind that the company is in Iowa.

Both firms are planning on spreading their product in the near future. Dwolla’s users are primarily in Los Angeles and New York, with a strong showing from Des Moines, and Zaarly’s current top three cities are New York, San Francisco, and Oklahoma City. Neither have a product outside of the United States, but Fishback mentioned that 30% of Zaarly’s web traffic is international. They are aiming at launching internationally in the third quarter of 2012.

Dwolla and Zaarly owes much of their success to the Silicon Prairie. Although both relied on investments from the coasts, they have proven that it is possible to grow a company in the Midwest. Fishback ended the conversation with a few words of wisdom for startups in the region: “Exploit your unfair advantages. Location, who you know, what you have… exploit them.”

Presenters: Greg Johnson, Hewlett-Packard; Marc Shillum, Method; Robin Lanahan, Microsoft; Walter Werzowa, Musikvergneugen. SXSW event page.

Branding is all about consistency, but can your efforts be too monotonous? In this panel, representatives from HP, Method, Microsoft, and Musikvergneugen debated this question.

Previously, they explained, brands were once singular, definitive, and complete. A logo and a tagline were present on everything that a company produced. But times have changed and customers are expecting to hear the story of our brand, and a story cannot be told by simply repeating ourselves.

Customers want brands to be familiar, yet unique and unexpected; they must fall in the middle of a continuum. Too much familiarity is kitsch and too much uniqueness is jarring. Shillum restated this point as “If I don’t vary myself enough, I don’t connect with the customer. But I want to be consistent so customers know what to expect.”

The most visual example of this theory is the idea of a motif. Beethoven’s Fifth Symphony begins with its distinctive short-short-short-long phrase and repeats it multiple times throughout the movement. However, Beethoven switched up which notes were played during this phrase. Sometimes it is played higher, sometimes lower. While it is distinctive at any point in the symphony, it is not monotonous and predictable. By establishing this motif, he was able to create a memorably consistent, yet interesting, piece of music.

Brands should work the same way: use a consistent thread running through everything we do, but do not be afraid to try something new, tell a story, be relevant, or create flexibility. Challenging the convention of extreme consistency is a tough proposition, but we can lose audiences without variety.

Presenter: Chris Risdon, Adaptive Path. SXSW event page.

Designing is more than making things look great or function in a specific way; design can be used to change human behavior. Chris Risdon, the Lead Experience Designer at Adaptive Path, discussed the value of designing products to incentivize positive change among users.

Behavior design is a “design with the intent to change someone’s behavior or attitude” and can be implemented through persuasive technology. Designers can create persuasive technologies by realizing how certain triggers work.

Risdon explained that it is best to design user-actionable triggers as simply as possible, because only highly motivated users will take the time to work with complicated interfaces. For example, if you heard about the Haiti earthquake on the news in an airport bar, you may have made a note to donate to the Red Cross. But because this is a fairly complicated action, only the most motivated will remember to get online, decide how much to donate, and provide credit card information to the Red Cross’s website. However, through an act of persuasive design, the Red Cross set up a system that will charge $10 to your phone bill when you text HAITI to 90999. This simplifies the process and has resulted in many more donations. You could have pulled out your phone and donated before even leaving that airport. The key to designing persuasive technology is to either increase motivation (which is a function of psychology) or to remove friction (a function of usability), and preferably to do both.

Additionally, behavior design is at work when defaults are built into the system. A study of organ donations showed very clear divides between countries, but with no cultural or economic rationale. The difference was that the high donation countries had an opt-out organ donation system, and the low donation countries were opt in. Through the power of technology, we can now predict “smart defaults” personalized to the user.

Finally, Risdon provided a framework to building persuasive technology. First, from a strategy perspective, ask what your value proposition is. What are you offering of value? (For example: Red Cross’s text-to-donate system offers convenience.) Then, ask where you want to affect change or apply persuasion? (Red Cross wanted to raise money for Haiti victims.) Next, ask what the behavior change is. (For Red Cross: increased donations.) Finally, do research and develop your design. (Actually creating the structure to donate through a text message.)

The takeaway from Risdon’s presentation is that technology allows us to create convenient, fun, easy-to-use products that can influence a behavioral change. These changes can create customers out of users, build loyalty, and encourage interaction.

Presenters: Vic Gundotra, Google; Guy Kawasaki, Alltop. SXSW event page.

Google+ is a different kind of social product, according to Vic Gundotra. In one of the first talks of SXSW 2012, Guy Kawasaki took the stage to interview Google’s Sr VP Engineering for Google+. Right off the bat, Gundotra emphasized that Google+ is a little less social network and a little more social platform that ties together all of Google’s offerings and input from your friends.

Gundotra likened Google+ to “Google 2.0″ – the next evolution in Google’s lifespan. While Google has been personalizing their products for years, with Google+ you can tell the company more about yourself, as well as tying your information to that of your friends. The purpose of Google+ is to learn more about you and make your web experience better. Gundotra said that “it’s amazing how much better Google can be if we know the tiniest bit about you”.

While this sounds like a strong business model for Google, many have criticized the company for integrating personalized results into their search product. However, Gundotra explained that an incredibly tiny amount of users have turned off personalization, even after the company made the setting an easy one to adjust. He said that advertisements are currently not affected by an individual’s Google+ data, but that they will be. Gundotra emphasized that Google’s belief is that ads should only be served at the “time of commercial intent” or when users are legitimately looking for search results, and that (unlike Facebook) Google will never serve ads next to photographs of your family members.

Another major issue that Kawasaki asked about regarded releasing a Google+ API. Google has been criticized for locking out developers by not providing an API, and Gundotra said that is not going to change any time soon. He took responsibility for not wanting to release an API because he didn’t want the Google+ stream flooded with content from third parties. He referenced how other social networks (presumably Twitter) have given developers free reign and then decide to revoke or limit API access. Admitting that Google+ still has some things to figure out, Gundotra said that Google will release an API “when [they are] confident [they are] not going to screw over developers”.

Beyond using Google+ to improve individuals’ web experiences, Gundotra also shared an example of a human connection that was made. In February, a bedridden woman with multiple sclerosis was able to virtually leave her house when a photographer used a Google+ Hangout to take her through the woods in Ontario.

Kawasaki’s interview with Gundotra provided good insight into Google’s thinking behind Google+. While Google’s learn-as-much-as-possible-about-our-users has turned some away from the company, Gundotra’s talk explained that (whether you like it or not) Google+ is here to stay.