Why Your Business Model Must Evolve and Prepare for Plan B

Your business model must evolve.

It reminded me of one of the biggest failures I was ever involved with. I was working for a startup, and we had a product with some problems. Before I joined up, they had built a database development tool which you could use to build websites. It was particularly well-suited for e-commerce sites.

When it came time for me to sell it, I ran into some problems. The main one was that the majority of people that needed to build such websites were already using PHP. Since PHP was free, and ours wasn’t, this was a problem. However, in talking to potential customers, I discovered that our software did one unique thing, that had some potential value.

Our software could use one query to interrogate multiple databases, and return an integrated answer. This ability had huge potential value for anyone trying to integrate a legacy database application into a new system.

I tried to get our CEO and our owner to redesign the software to attack this market. I failed.

Not too long after that, so did our software.

Compare that story to this one: Caterina Fake and Stewart Butterfield were running a company building a game called Game Neverending. As part of the game, one of the engineers wrote a photo-sharing module. They quickly realised that this module had more commercial potential than the game. More importantly, the photo-sharing could be brought to market more quickly, which was crucially important because they were running out of cash.

Their photo-sharing module became Flickr.

This is a textbook example of a pivot – something that we even have conferences about now:

Fake and Butterfield were able to move from their original idea to one with greater potential. My startup couldn’t. According to Clayton Christensen, the need to pivot is more common than we think:

Professor Amar Bhide showed in his Origin and Evolution of New Business that 93 percent of all companies that ultimately become successful had to abandon their original strategy—because the original plan proved not to be viable. In other words, successful companies don’t succeed because they have the right strategy at the beginning; but rather, because they have money left over after the original strategy fails, so that they can pivot and try another approach. Most of those that fail, in contrast, spend all their money on their original strategy—which is usually wrong.

93% of successful companies pivot!!

This is why business models must evolve – because our original one is probably wrong.

John Mullins and Randy Komisar talk about how to address this in their excellent book Getting to Plan B: Breaking Through to a Better Business Model. Their primary recommendation is use dashboarding to track the development of your business model. They use a more restricted view of what a business model is than other current models of business models do, but their approach is very useful.

Mullins and Komisar recommend using analogs and anti-logs to develop your original idea. Analogs are companies or products that you want to be like, and ant-logs are the opposite – examples of what you want to avoid. These will help you build your first business model.

The next step is identify the leaps of faith – what are assumptions that must be correct for your business model to work? If there is no previous data to help you test these, then you have a leap of faith. The last step is to figure out ways to build and test hypotheses that will be determine if these assumptions are correct or not.

If they aren’t you need to evolve your business model to a new version.

The best resource I’ve run across to help you build and test business model hypotheses is Ash Maurya’sRunning Lean: Iterate from Plan A to a Plan That Works.He uses a modified version of the Business Model Canvas. Maurya says that building a viable business model is actually the primary objective when you launch a new idea. In other words, “your product is NOT ‘the product‘ – your business model is ‘the product.’”

Here’s what he says about hypothesis testing:

Once you know what you need to learn, the final step is then setting up a series of experiments designed to uncover some answers as quickly as possible. The tactics that you use is highly dependent on the stage of your startup. For instance, the period before Product/Market Fit is usually riddled with qualitative learning (customer interviews/usability tests), while the period after Product/Market Fit tends to be more quantitative.
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As entrepreneurs we view the world with a strong solution bias. Once we acknowledge that the solution is not the whole product and that we don’t need to pretend to believe our made up answers, we shift from pitching to learning – from other people.

I believe the true benefit of creating a business model/plan is only realized when it facilitates learning from other people.

Effective business models are dynamic. The odds of getting yours right on the first go are low. So your first business model is a starting point.

You need to identify the things you don’t know, and build experiments that will help you learn what will work.

That’s what Butterfield and Fake did with Flickr, and that’s what I should have done in my startup. You can bet that’s what I’ll do while Nancy and I work out a business model for her, and when I launch new ideas in the future.

The business models that win are not those that are the best right out of the box. The business models that win are the ones that evolve quickly and effectively. Building them to change is the best way to try to build one that will last.

Innovation is a system; Brainstorming an activity

I'm interrupting my planned cycle of blogs about innovation andvelocity to write briefly about the reasons brainstorming and idea generation can seem so difficult and so pointless, and the continuing conundrum about the effectiveness of innovation.  Note that I draw a distinction between these two concepts - idea generation and innovation - because one (idea generation) is just an activity or phase within the larger context or system (innovation).  When idea generation, brainstorming or whatever label you choose to use to describe generating ideas happens outside of a greater context of innovation, the results are often less than satisfactory, for four key reasons:

1. Ideas often aren't aligned to strategic goals or needs
2. Ideas don't satisfy key customer needs or anticipate future trends or shifts in the market
3. The organization has little ability to speed good ideas into the market
4. There are no enabling or sustaining capabilities or processes to further innovation activities

Let's imagine that, like many firms, your team has spotted a problem or challenge and has been told to "innovate" a new solution.   Like many firms you'll rush to "generate ideas" using brainstorming, and many times you'll be unhappy or disappointed with the results.  Often the ideas are simply incremental or don't introduce new concepts or features.  The ideas you capture seem familiar and rehashed.  In the end a concept no one particularly likes is supported by an individual with power or stature, everyone falls in line, and little gets done.

This is, of course, a description of a poorly run and managed brainstorming or idea generation session, but it is not a description of innovation.  In fact it leaves out or ignores much about innovation as a "system".  Paul Hobcraft and I documentedthat there are at least four significant components to an innovation system:

1. Strategy and tight linkage to corporate goals and strategy
2. People, skills and roles
3. A defined workflow or process
4. Cultural engagement and support

If all of these factors are carefully considered and implemented, your organization may have the ability to innovate, and to innovate consistently.  Starting with idea generation, while ignoring the other factors present in an innovation system, is similar to wondering why the car won't start when the battery is dead and there's no gas in the tank.  There are many mutually reinforcing components, decisions and activities that work together to make innovation work.  Idea generation is simply a step in a defined workflow or process, and frankly not even the most important step.

What happens if you ignore the components of the innovation system?

Strategic Alignment 
Ignoring or doing a poor job linking strategy and innovation means the team creates ideas that are very incremental, thus in line with corporate goals but don't "move the needle, or they create ideas that the executive teams can't understand or don't believe support the mission and business of the organization.  Often the strategic goal of idea generation is merely to respond to an immediate threat, rather than a carefully defined strategy with longer term consequences.

People, Skills, Roles 
Ignoring the work around people, skills and roles means that you have people with little expertise generating and managing ideas, who have much more familiarity and comfort with efficiency and effectiveness.  Further, these people haven't been trained for their innovation roles and don't have the knowledge or skills necessary to do the job well.  Finally, they often aren't compensated or rewarded for risky innovation work, which makes them less likely to work deeply and invest the time necessary to do the job well.

Innovation Process or Workflow 
If you ignore the fact that innovation is a workflow or a process, you'll find your team generating ideas that simply stack up in a queue waiting for approval, funding and product development bandwidth.  Even if all of these factors fall into place you'll soon discover that an expensive launch of "me too" ideas isn't helpful or valuable, and that the "downstream" activities you need to build and launch a new product don't appreciate your occasional surprises.  Turns out that while your idea may be urgent, product development, legal, regulatory and IT are fully loaded for the next few years.  Changing priorities and work assignments may be difficult in order to bring a product to market quickly.

Culture 
Finally, if you ignore your corporate culture or, more to the point, hope to run roughshod over the way your culture normally works, you're in for a shock.  Existing corporate culture, attitudes, belief systems and compensation strategies are far more powerful than a good idea.  Cultural barriers will arise at every turn to slow a good idea, chip away at it and eventually stymie its progress.  You can innovate outside your corporate culture (in a skunkworks) or you can change your corporate culture, but you can't innovate well within a corporate culture attuned to efficiency, consistency, short timeframes and reduction of risk.





Brainstorming, Idea Generation or any other activity meant to generate ideas are simply that - activities.  These activities need context (what does the client actually want?  What is likely to happen?  What are our competitors doing?) and alignment (What problem are we solving?  Do our ideas align to strategic goals?) before ideas are generated.  For rapid implementation and commercialization, ideas need defined processes (How do good ideas get prioritization in product development?  Who is responsible for launching the concept?) and cultural emollients (Why does the culture accept this idea?  Who lowers the barriers?  How are compensation programs and reward systems changed?)

If you want to witness this for yourself, do the following experiment.  Tell an innovation team that they must create a viable, interesting new product or service and release it to the market within a year.  Ask them to do the work on a part-time basis, and offer them no new training, methods or skills.  Simultaneously, ensure that their "day jobs" become more demanding with tight deadlines and important activities.  Don't provide any additional funding, resources or rewards for innovation work.  In less time than you can imagine possible, the teams will exhibit a dissonance, uncertain how to proceed, because while innovation is important, it isn't as urgent as the "day job" and the methods and processes aren't defined.  Does this sound like cruel and unusual punishment?  It's what many innovation teams face every day.

Brainstorming or idea generation are simply activities.  To succeed, they need to be placed within the appropriate context of an innovation system.  This concept of an innovation system means that there is work involved to build up the capabilities to innovate successfully, much like every other viable, functioning process in your business.  Ad hoc, occasional attempts at innovation often fail, for the reasons I've listed above.

The Baby Stroller of the Future Isn't a Stroller

The stroller space is ripe for disruption.

Enter the BuzzyBaby. A team of students from MIT and the Rhode Island School of Design collaborated to create the futuristic baby-moving device, which is not so much a stroller as a system of infant transport. The key innovation is a sling and a shoulder strap that attach to the baby, the stroller, and the parent -- so that the parent can sling the stroller on to carry it around while resting the kid on his or her hip. That's useful in particular for stairs -- but also for any situation in which it'd be more practical to carry, rather than push, a stroller. The sling snaps into and out of the shoulder frame via a removal pad that fits into most brands of lightweight strollers. As The Boston Globe notes, "the harness acts much like a universal remote control, providing one device to connect several."

That's nice for parents -- 77 percent of them, per one study -- who own more than one stroller. While the shoulder-sling framework isn't ideal for the mini-SUVs of the toddler transport world -- the Orbit Baby G2 Stroller Travel System is not terribly shoulder-slingable -- it could work well for smaller, slimmer models like the Maclaren Volo or the Chicco 6 Comfort Travel Stroller. For example.

The idea for the sling system emerged from an MIT product design and development course. Students studied footage of the wife and infant son of one of their team members, Kin Lo -- shots of the pair caught in that awkward stairs-in-the-subway-station moment in New York City. From there, the group imagined technologies that might make the mom's situation easier to navigate -- and considered everything from "a stroller that folded up like a clam" to stroller-friendly modifications within subway stations themselves. They settled, finally, on the back-to-the-future sling apparatus. 

The students presented the idea to their classmates in mid-May, and are now considering how to bring the idea to market. Does it make more sense to partner with a stroller manufacturer, or to sell BuzzyBaby as a stand-alone accessory kit? The team has filed for a preliminary patent; another monetization option would be simply to sell that patent to a manufacturer. Regardless, they hope the idea will be available to consumers by next spring -- which means that the age-old technologies of kid-carrying are about to get a little boost.

Comet Coffee – Innovation Matrix Case Study

 

This morning I gave a talk on The Innovation Matrix up in Mackay. It was great to see that the ideas in it resonated with people up there, even though the business environment there is a bit different from many of the other places that I work.

After the talk, I dropped by Comet Coffee to have a coffee and a chat with owner Jane Turner, who I met at the talk. She started Comet about a year ago. As we talked about what she’s done in that time, I realised that Comet Coffee makes a pretty interesting case study of how firms move through The Innovation Matrix.

As a startup, Comet Coffee began as an Accidental Innovator. They were founded with two initial innovations, but they did not have any kind of systematic innovation processes in place.

Their first innovation was in bringing high quality coffee to Mackay. This was probably viewed as a bit risky – was there enough of a market? Schumpeter talks about opening up a new market as a form of innovation, and this is a good example. The second innovation was a new service – starting their day at 5:30, a time when not much else was open in Mackay.

And both ideas worked.

Since then, Jane and company have done a great job of developing a culture of experimentation, combined with a good sense of what their customers value. The outcome has been a deepening of the relationships they have with their core customers, along with good levels of organic growth.

One example of experimenting is their installation of airplane seats. Jane said that when they first put them in, people didn’t take to the idea immediately. But soon, the seats became popular as a comfortable place to sit while you wait for your coffee. They’ve continued to test ideas too – not all of them work, but enough do to continue to improve the experience.

They’ve listened to customers by introducing a series of environmental initiatives, including serving all of their coffee in biodegradable cups.

As I left today, I asked Jane where she thought Comet Coffee fit on The Innovation Matrix. She said that they were probably just moving into the Fit for Purpose category. That’s exactly what I had been thinking.

The culture of experimenting has led to a more explicit embrace of innovation as a core culture (even though they don’t necessarily think of it as “innovation”) – indicating an increasing Innovation Commitment. But while this has happened, they have maintained their reasonably high level of Innovation Competence.

Comet Coffee is an interesting case study, which illustrates some key points:

• Their evolution follows a desirable path. This is pretty much the ideal path for a startup to follow. Some startups get caught up in putting business processes in place that end up killing the innovative spirit that was there at the beginning. The route that Comet Coffee has followed is better. They have increased both their Innovation Commitment and their Innovation Competence in the year that they have been operating. This bodes well for the future.
• Anyone can innovate. A coffee shop is not a high tech venture – they’re not inventing new to the world technology. And yet, Comet Coffee introduced a number of new ideas successfully. They developed a novel value proposition within their environment – and that’s innovative. If they can do this, so can you.
• Many Fit for Purpose innovators are not high profile. I heard about another great thing today, which is the Tropical Innovation Awards. Check out their website – they’re doing really interesting work. Many of their award winners are also in unglamorous industries. One of the key messages with The Innovation Matrix is that you can be an effective innovator without being Apple or Google. Comet Coffee and the firms involved in the Tropical Innovation Awards are great examples of this.
  This is why the Fit for Purpose category is so important. If you are not aiming to differentiate yourself based primarily on innovation, this is a reasonable place to be. As long your innovation supports your primary source of differentiation, you can be successful without having to be a World Class Innovator.

In New York, bedroom furniture store lets customers nap for free

Small rentable spaces designed to allow busy workers the opportunity to get 40 winks while they’re out and about in the city have been around in countries such as Japan for a while – even London got its own sleep pods recently, courtesy of Podtime. Combining this concept with a try-before-you-buy twist, the eco furniture COCO-MAT store in New York has set up a hotel room-style space where customers can take a nap for free while also testing out the quality of their beds.

While other furniture companies might actively discourage customers from getting into their showroom beds, Greece-based COCO-MAT is enabling visitors to its outlet in New York City’s SoHo district to spend up to a couple of hours in its mock hotel suite, which features its Californian king-size bed, fresh linen, soothing music and a complimentary glass of juice. The brand also has a policy of ethical manufacturing – its beds are made of natural renewable materials and are produced in a sustainable manner, while the private bedroom is available to customers for free, unlike existing rental options. Speaking to MailOnline, founder Paul Efmorfidis said: “I have no trouble if they misuse [the service]. If you come here with your friends for a handful of naps and don’t buy anything, that’s OK.” His reasoning is that the free sleep service will get customers talking about the store with friends and Mr Efmorfidis believes that the next time they need a mattress, the first place they will think of is COCO-MAT. Customers can book themselves into the sleep suite or walk in if it is vacant. To top it off, every store serves free juice, espresso and Greek food to customers at lunchtimes.

COCO-MAT’s nap room offers free a service (where others charge) at the same time as allowing customers to try out their products. The brand believes this will increase customer engagement even if they don’t intend to buy. Could you adopt similar thinking to change the way customers think about and interact with your business?

Are you innovating for the past or the future

I had the opportunity to meet and chat with local ethnographic researcher Cynthia DuVal about the role of ethnographic research in the innovation process, and she shared an insight that I thought I would share with the rest of you.

She mentioned that it is important for a good ethnographer or researcher to consider the timeline of the development process when extracting insights. Why is this important?

Well, if you’ve got a 12-18 month product or service development process to go from insight to in-market, then you should be looking not to identify the insights that are most relevant today, BUT the insights that will be most relevant 12-18 months from now. If you can go from insight to in-market faster than that, that’s fantastic, but the point still holds.

If your research team takes all of the data they’ve gathered and extracts insights for today, then you are innovating for the past, and if they develop insights too far along the time continuum then you are innovating for the future. You can’t really innovate for the past (your offering won’t be innovative and will be beaten easily by competitors). If you innovate for the future, then adoption will be slow until customers become ready. The trick is to task your insights team to provide guidance for the future present.

The ideal of course is to design a product based on customer insights appropriate to the time of the product launch to maximize the useful life of the customer insights.

The product or service are an expression of the customer insights, and it is the useful life of the insights that we are concerned with, not the useful life of the product or service (a post-purchase concept). When the insights reach their sell by date, sales will begin to tail off, and you better have another product or service ready to replace this one (based on fresh insights).

Now, extracting accurate customer insights for the present is difficult enough. Doing it for the future present is even harder. But, if your team starts out with that as its charter, they will likely rise to the challenge, for the most part.

Because the team will likely only get the insights mostly right, it is important that your go-to-market processes include a great deal ofmodularity and flexibility. In the same way that product development processes have to design for certain components that are ‘likely’ to be available, but also have a backup design available that substitutes already released components–should the cutting edge components not be ready in time.

To innovate for the future present, you must maintain the flexibility to tweak branding and messaging (and even the product or service itself) should some of the forecasted customer insights prove to be inaccurate and require updates. It is also a good idea to evaluate, as you go, whether or not a fast follower version (e.g. iPhone OS v3.1) of the product, service, and/or branding or messaging will need to be prepared to address last minute customer insight discoveries that can’t be incorporated into the product or service or branding/messaging at launch.

So, will your team have the flexibility necessary to innovate for the future present, or will you find your team innovating for the past or the future?

It’s all about networks

It’s all about networks. Understanding networks that is. This is the shift our organizations, institutions, and society must make in order to thrive in an always-on, interconnected world.

Changing the mechanistic mindset: Work is changing as we get more connected. The old ways of organizing work are becoming obsolete, as 84% of workers in the US planned to change their jobs in 2011. Workers want out, in spite of a lacklustre economy. We are seeing mass, decentralized and social movements that confront existing hierarchies, politically and in the workplace. The uprisings in North Africa were good attention getters. There is no normal. All our institutions are facing the challenges of always-on connectedness and the need to adapt to Internet time. Social media are just the current tip of the Internet iceberg, making work relationships much more complex. Workers do have to step up, but they also need the tools and authority. Encouraging workplace practices like personal knowledge management is a start.

It’s the network: Thinking like a node in a network and not as a position in a hierarchy is the first mental shift that’s required to move to a collaborative enterprise. NurturingCreativity is now a management responsibility. The old traits of the industrial/information worker were Intellect, Diligence, and Obedience. The new traits of the collaborative worker are Passion, Creativity, and Initiative. These cannot be commoditized. People cannot be creative on demand. The collaborative enterprise requires looser hierarchies and stronger networks.

Network Thinking: One major challenge in helping organizations improve collaboration and knowledge-sharing is getting people to see themselves as nodes in various networks, with different types of relationships between them.

Network Walking: One way to convince managers of the importance of network thinking is to force them to connect with their networks by getting out of their offices, physically and virtually. It’s not a question of what keeps managers awake at night, it’s what can we do to make sure they are awake to their networks during the day. Go for a walk.

Finally, this RSA Animate video provides an excellent overview of the power of networks and the challenge of mapping an increasingly complex world. It’s well worth watching.

The Man Who Took on Amazon and Saved a Bookstore

Jeff Mayersohn, the owner of Harvard Book Store in Cambridge, MA,  has not only managed to survive, but prospered, in the age of e-readers and the mighty Amazon.

A former technology executive with a passion for reading and books, Jeff saw – like everyone else – that the digitization of content was destroying the neighborhood bookstore.

Imagine for a moment what it would feel like if people walked into your company and used the lobby to call your competitors and buy their products. That’s standard consumer behavior in a bookstore. People browse, find a book they like, pull out their smart phone, and order online.

Making an intuitive leap, Jeff wondered if the opposite could be true? Maybe access to the vast universe of digital content could also save the bookstore. Maybe the bookstore, while limited in inventory, could evolve in the digital world and become a destination where people had access to every digitized book ever published.

Essentially, Jeff installed a printing press to close the inventory gap with Amazon.  The Espresso Book Machine sits in the middle of Harvard Book Store like a hi-tech visitor to an earlier era. A compact digital press, it can print nearly five million titles including Google Books that are in the public domain, as well as out of print titles. We’re talking beautiful, perfect bound paperbacks indistinguishable from books produced by major publishing houses. The Espresso Book Machine can be also used for custom publishing, a growing source of revenue, and customers can order books in the store and on-line.To truly compete, he would also have to solve consumer’s expectations for instant gratification and delivery. Jeff needed a complete production, distribution, and fulfillment model. He has likely shocked a lot of people by building one in his own backyard.

You can walk into the store, request an out-of-print, or hard-to-find title, and a bookseller can print that book for you in approximately four minutes. Ben Franklin would be impressed.

But you don’t even have to go into the store to get a book. If you live in Cambridge and neighboring communities, you can order online and get any book delivered the same day by an eco-friendly Metroped“pedal-truck,” or a bicycle, as I like to call them. Beat that Amazon.

Marketers know that success comes from a complex formula, and Jeff’s strategy includes many moving parts. Harvard Book Store pays fanatical attention to customer service with an unrivaled staff of passionate and educated booksellers. They have spent years building a local brand. They bring people together with over 300 public events a year. They’re exceptional retailers with a frequent buyer program. They understand technology, and you can expect them to continually adapt.

Of course, Amazon has got nothing to fear, but that’s not the point. Harvard Book Store defended their market and they did it by leveling the playing field with a giant. You shop there because it’s the most effective and satisfying experience.

Ultimately the bookstore exists to serve a community, and Jeff devised a strategy to safeguard that mission. While people will always take the path of least resistance to buy a book, they still value the experience of browsing and spending time in a place that ignites their imagination. That’s the position that Harvard Book Store has defended.

It might sound audacious to say that one bookstore devised a strategy to counter the long reach of Amazon. But it’s no more audacious than Amazon’s conviction in 1999 that you could sell books over the Internet.

Miyoo: A Social Fashion App to Snap, Tag, and Share What You Wear

The Chinese-made Miyoo app touts itself as a social fashion experience for women that’s more private than microblogging on Weibo – where there’ll be pervy men checking you out – and less hassle than Pinterest clones like Mogujie.

Miyoo.cn says it’s more interactive than its social rivals, too. In its new app for iPhone, users can make a virtual catalog of their wardrobe (pictured below), tag the items and their brands, and share your outfit for the day with your wider network or via connected services such as Sina Weibo. The main timeline is reminiscent of Path (also pictured below), the American startup app for close friends, where all the recent activity shows up. Clicking on a user within Miyoo gives you the option to browse, as many women love to do, their wardrobe as well.
As if all that’s not enough for a white-collar, iPhone-toting, Chinese woman to take in, the app also features brand tags – so you can keep an eye on, say, Chanel items – and a curated selection of fashion news.
The Beijing-based startup enters a lively fashion-oriented social media scene in China in a year that looks set to be dominated by Pinterest-like sites – such as the one from Taobao, the country’s online shopping market leader – and social/mobile commerce as well. But Miyoo seems to have enough that’s unique to give it a shot at success.
The Miyoo app is available only for iOS for the time being, and is in the iTunes Store. Try it on for size.

Modular Tray Table- Use according to requirements and design

Tray table, designed by Pedro Feduchi, is a modular series of desks that can be used alone or in an office space. 

The versatility of this design is what I like most about it. You don’t often see office furniture made for mass use that’s able to easily adapt for use in one’s home, but Tray is definitely an exception. Bravo!

 

Paypal trial extends Vend’s reach by 110 million

Vend's quest for world domination got a boost last week thanks to a US partnership with Paypal and its base of 110 million active users.

The trial means customers can check into a shop using the Paypal app. Vend notifies the retailer of any checked-in customers and automatically syncs to its customer database for easy access to sales history and customer management. The customer pays for a purchase using the app; the store confirms the transaction using their name and photo.

Vend is also taking registrations of interest for retailers in Canada, Australia, Japan, and Hong Kong, with the rest of the world to come "in time".

Founder Vaughan Rowsell said the deal was two months in the making and gave Vend retailers
 immediate access to a huge base of customers armed with mobile payments.

"In the first meeting we showed them our vision of the future, and it was in line with theirs.  So we did a proof of concept, and it worked and the next thing you know we are launching it with them at an event at their HQ in San Jose with David Markus, the president of Paypal.

"I don't think we thought too much about it at the time, we were just focussed on making something magic.  Looking back, I can say 'Wow' now."

Rowsell said it made sense for Paypal to enter bricks-and-mortar retail transactions, as did Google, and he expected Apple and Facebook to get in on the action at some point. 

He also urged other entrepreneurs to push on and not hold back.

"Be single-mindedly determined about your vision, and don't let anything get in the way.  Procrastination is your worst enemy, and with most of these things, timing is everything.  We had an awesome product in market that could do what was required to make the Paypal mobile payment work, at the right time when they were looking to innovate in this space.  None of it could have happened if I didn't make the decision to
start those two or so years ago."

Good for business

US design store and gallery Rare Device is one of the retailers involved.

Owners Giselle and Phurba Gyalzen say the integration of Paypal and Vend is the future, making it easier for customers to shop and for them to run the store.

"It allows us to recognise our customers by name and face and allows us to provide them with a much more personal shopping experience," said Phurba in a promo video for Vend.

Adds Giselle: "It's really good for business."

Paypal also announced a bundle of other deals at the same time . Those included partnerships with POS software providers Leapset, ShopKeep andErply as well as Vend, which would give it access to 50,000 mid-market businesses offline; VeriFone and Equinox, the number one and number three POS terminal manufacturers in the world; and 15 new US national retailers.

In March, Paypal launched a mobile credit card reader to compete with mobile payment company Square.

Vimeo Co-founder Starts DIY.org, An Online, Social Scrapbook For Kid

 A child makes something, captures it using the DIY.org app on his parents’ phone (or digital camera), then adds it to a virtual portfolio. He can then show off his work by sharing the portfolio’s URL with his parents and family. Soon, DIY.org will open up kids’ portfolios so they can scan each other’s assorted doodles, finger paintings, and model Spitfires.

CHIL

"What’s remarkable is that kids are aware of the possibilities when they share something on the web,” Klein tells Co.Design. “If kids are going to be online… we feel there’s an opportunity to provide them something special, something that encourages creativity and personality, and even gives them incentive to go offline, too. The world is wonderful, we want to help them discover it, learn from it, and contribute to it.” Which makes the whole thing sound like Baby’s First Deepak Chopra. Here’s a less romantic take, and the real reason why DIY.org might take off: Children love promoting themselves almost as much as they love being praised. In a ballet recital, they’re more interested in looking at you--and gauging your approval--than in getting the steps right. DIY.org gives them the biggest stage of all, the web. 

And it isn’t just for the good of young minds everywhere; this is a business. The service is free for now, but eventually, it’ll offer paid memberships with “extra features.” (What exactly, Klein won’t say.)

Klein runs the site alongside Isaiah Saxon, Daren Rabinovitch, and Andrew Sliwinski--a bunch of self-described “makers and doers”--from a San Francisco storefront (complete with a paw print on the door). How Klein went from Vimeo, a video-sharing site that attracts 65 million unique users a month, to finger painting and paw prints (with stopovers at Boxee and Svpply) is perhaps not as mysterious as it seems.

As a kid, Klein loved making model railroads, building forts, and writing short stories. As an adult, he prefers the urban woodsman brand of DIYand has constructed a cabin out of old barn wood and maintains the Tumblr freecabinporn.com. “My passion for DIY is driven by what I learned at Vimeo,” he says. “Everyone is able to be creative. And our confidence to be creative flourishes when we’re surrounded by people who positively support it.” There’s something sweetly ironic in that: To do it yourself, you have to do it with others

Fold My Ride: The Bike That Could Change Transit

Folding bikes are the black sheep of the bike community, neither respected by hard-core cyclists nor frequently used by the average citizen. But a new global company called Tern Bikes is out to change that perception—and, in the process, change transit.

“We just said, look, a folding bike doesn’t have to look and ride like a contraption,” says Steve Boyd, the company’s general manager in North America. Tern Bikes launched publicly last year after several employees of Dahon bicycles, including the founder’s son, departed to form a new company to create high-quality folding bikes.

The most reliable market for folding bikes is people with “acute needs”—they’ve got an RV or a boat and want to keep a bike on it, they live in small walk-up apartments or face other space constraints. These people will find Tern bikes on their own. Boyd and his colleagues, though, want to expand the market.

“We’re broadening it by calling it urban transportation,” Boyd says. “More and more people are moving into these re-urbanization movements in places like downtown L.A. where no one lived five years ago.”

Tern’s pitch is the first-mile, last-mile argument: Bikes can effectively extend the useful range of public transit by providing an easy way to get to and from stops. Folding bikes are even more effective in this role because of their compact size; they also encourage bike commuting in the event of inclement weather, since they can be easily carried not just on public transit, but in any car.

Sixty four percent of trips in the U.S. are two miles or less, Boyd says, and if people would bike just ten or twenty percent, it would have an incredibly beneficial effect.

“A bike, in general, can fix everything,” Boyd says. “The world’s problems, much of them revolve around congestion, pollution and obesity, and the bicycle is the perfect solution to all those problems, and our [folding] bikes are the most useful of all bicycles.”

The company didn't want to compromise on aesthetics or ride. Tern’s bikes have won several design awards; its engineers designed special forged hinges for the bike’s two folding joints that keep the frame stable while riding but open smoothly when you fold it. Pedaling around Austin, the bike rides just like a Giant or a Trek; Boyd says you couldn’t tell the difference between his bikes and a regular bike if you were riding blindfolded—not that he recommends it.

Boyd says Tern is on pace to sell 100,000 bikes each year, ranging from its best seller, the utilitarian Link D8, at $600, to “the Ultimate” Eclipse S11i at $2,300. Most are sold in Germany and the Netherlands, where public transit and bike enthusiasm create a perfect synergy for Tern. Each year, Boyd says, Germans purchase as many specialty bikes as Americans.

While the bikes are made in Taiwan, the company’s 80 employees are scattered around the globe. In Austin, Smith talks happily about the city’s robust cycling culture and community, Boyd, the vice president of the board of the Los Angeles County Bicycle Coalition, says that it will take a while for Los Angeles and other American cities to catch up to Austin and Portland, much less Amsterdam or Berlin.  

The big challenge is the distance of commute; in Los Angeles, Boyd says, the average commute is nearly 42 miles, far above the national average of 12. The answer is a more expansive transportation system, and “any infrastructure takes time.” Still, Boyd points to commitments from L.A.’s city government and others across the country as evidence that both transit and cycling infrastructure are beginning to advance hand-in-hand.

“People are riding their bikes a whole heck of a lot more for everyday transportation,” Boyd says. It's a chance to sell some bikes—and to solve some problems.