Liad Shababo

We thought long and hard about where to set our commission level for Shoply.com.

We provide a much needed and valuable product, wrapped in great service and support. We decided our free plan would have a 6% commission level. Anyone can open a socially integrated shop on shoply, use our marketing tools, customise the design to their hearts content and make use of our centralised and syndicated marketplace which drives their shop traffic and sales and pay us absolutely nothing – other than a 6% commission on the back-end for sales made.

We set the commission level semi-strategically in that we’re positioning ourselves as a low-end disruptive innovation in terms of price, simplicity and convenience. We feel the 6% is cheap for the service we provide.

With that in mind, I was quite shocked to see that one of my favourite blog networks envato – charge a whopping 75% commission for people selling digital items through their various marketplaces. Granted the rates decrease based on exclusivity and volume to a low of 50% – but still 50% !! – that’s nuts.

Curious thing is their sites are bursting with sellers and seem to be doing a ton of business.

Would love to know your thoughts on how their sellers stomach paying such a huge commission and whether we may have set our rates too low in comparison?

A Steve Jobs presentation from the mid 90’s recently surfaced. He gives an overview of Apple’s advertising problems and explains how they’re going back to basics with a new branding campaign called ‘Think Different’. Their commercials will stop talking about features and specs and start talking about values. Beliefs core to Apple.

The presentation is great vintage Steve and worthy of watching – the commercial itself is at the end of the presentation. What resonated with me most was the campaign wording:

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

Take a minute to think over the last sentence – The people who are crazy enough to think they can change the world, are the ones who do

How crazy are you feeling today?

You’re walking through a dark forest in the dead of night. The rain is lashing in your eyes, the wind howling at your back, the cold biting with every step. You knew were you were going. You saw a path to get there. You were inspired and energised, but that was long ago. It’s now so very dark and so very cold. You’re scared and alone. You can’t turn back. You must go on.

A crack of thunder suddenly pierces the night sky. A bolt of lightening momentarily illuminates the forest. For a split second, the forest is bathed in light. All is perfectly clear again. You can see where to go and how to get there. You know how to navigate the forest and bypass the obstacles and dangers. You lay eyes on your glorious destination. For the briefest of seconds your clarity returns. You have complete and total faith once more. You know where you’re going and how to get there.

All too soon, the lightening fades and you’re plunged back into darkness. Again you feel the rain, wind and cold. You’re alone once more and must fend for yourself. Left to continue your journey with only the most fleeting of memories to help guide you in your treacherous and gruelling path. You keep walking, hoping, waiting, praying for the light to return.

– Moses Maimonides (1135-1204) a medieval Jewish philosopher was the first to use this analogy when depicting man’s relationship with faith. He sought to explain how life is full of trials, tribulations and uncertainty, peppered momentarily by flashes of incredible inspiration and absolute clarity.

As an entrepreneur the analogy resonates strongly. We are all on unique journeys. Building our visions and companies, doggedly pursuing them through good times and bad. Trying to keep sight of the destination and not falter along the way. But falter we do.

In times of darkness when we feel lost and alone we must keep strong and remember the clarity, focus and vision we had. For as sure as day follows night, they will return once more.

As a parent few things give me as much pleasure as watching my kids play nicely together, lookout for each other and generally enjoy one another’s company. You get a warm feeling inside when you see things you’ve created exist together in harmony.

I felt that lovely feeling today. It wasn’t however whilst watching my kids. It happened whilst watching two of my Shoply compadre’s working through a complex piece of functionality…together…in harmony.

They are both extremely talented engineers when working alone but when combined – magic happens. Watching them sit together and discuss, formulate and then execute a solution was a joy to behold.

Team members are pretty close to being family. Spending hours and hours together, sharing lives, joys and tribulations – shared vision and goals – shared successes, shared failures.

It was then that I realised that as an entrepreneur, your team and your children are very similar. Not in the sense of control or authority but in terms of they’re both something you’ve created from scratch, something you’ve built and moulded. You’ve tried to embue them with culture and values, you want them to bond, enjoy, respect and ultimately empower one another.

Just as with your kids, you want the best for your team, individually and collectively.

It makes perfect sense that the joy you feel when your team are working in peace and harmony is just as powerful as that of when your kids are.

Was having a phone call with an ebay power seller (50,000 feedback – a proper big fish) as part of my customer development work. We were discussing how Shoply would be seen by long-term ebay sellers and what could be done to make selling on Shoply quick and frictionless for them. The conversation was fruitful and I gained a lot.

We discussed Shoply’s current homepage which looks like this:

I mentioned how we’d designed things to be super simple and easy for sellers to open a shop and get started. How we’re looking for sellers initially so targeted the homepage at them by giving them a direct path to register and not cluttering the UI up with buyer related features and functionality.

He told me I was making a huge mistake and to target sellers effetively – the homepage had to be designed for buyers!

WTF? Come again? I’m after sellers, so why the heck would I want the homepage to talk to buyers?!? He explained the logic, and you know what – he was damn right.

Even though I’m looking to attract sellers, what are sellers looking to attract? That’s right BUYERS! Sellers need to see and feel that our homepage talks to their customers – Buyers, and NOT to our customers, sellers. You with me?
By making the homepage attractive for buyers – I’m actually making it attractive for sellers!

It’s contrarian thinking, I’m annoyed I didn’t think of it myself first – but it shows the power of simple customer development. Something we would never have thought about and may have cost us dearly was brought to our attention by a prospective customer who willingly told us how to improve our offering to make us more attractive to them and thousands of others like them.

I bet you can guess what’s top of our list of UI changes! There’s a quote about this kind of thing, i.e when you’re hunting one thing you actually go after another – but I can’t remember for the life of me what it is.

**Update**

It’s now 3 hours later and based on our learnings we’ve already pushed a new homepage live which we’re currently A/B testing. Whaddya thing? All good in the hood?

Am beginning to set things in motion for Shoply’s seed round of funding. (Shoply is a social commerce platform which democratises ecommerce by tearing down wealth, skills and psychological barriers to opening a shop and selling online).

It’s more than likely that investment will come from UK sources. I’ve nonetheless reached out to a handful of US Angels who I’d love to have involved. Investors will normally only invest in their backyard. This holds more true for angels/micro VC’s who simply cannot manage investments far from home and thus gratefully international opportunities on principle.

One of the US Angels I reached out to was Chris Sacca, MD of LowerCase Capital, an accomplished entrepreneur turned investor (not such a bad singer either). Whilst likely that the geographic issue (we are based in London) would kill any chance of working together before the actual investment opportunity could be discussed – It seemed foolish not to send an intro email.

I am posting below the auto-responder which Chris send’s out on receipt of a pitch email (the email is publicly available so I’m sure he won’t have a problem with it being posted). The content, tone and sincerity of the email is impressive and actually heart warming. Whether I hear back from him personally or not – the email highlights what a straight-up guy Chris is and reinforces for me why he’s held in such high esteem by entrepreneurs and investors alike.

I just want to say thank you for submitting your idea to Lowercase
Capital. I realize the thought and effort that goes into each of your
pitches and am flattered that you chose to share with us the
opportunity to do business with you.

That said, though we cover an arguably insane amount of ground,
Lowercase Capital consists of just two people: myself and my wonderful
assistant. As such, it is impossible for us to thoughtfully respond
and engage with each of you.

Right now this list averages on the order of 20-25 solidly crafted
pitch emails a day. That is a lot of reading, but I still personally
review each one. From there I apply some selection criteria and we
request follow-up information from about 3%. Depending upon how that
goes, we might ask for a meeting with a fraction of those.

All told, I never wanted to be “that guy” who doesn’t reply to every
email. But, there just isn’t any way to devote all the time required
by my existing portfolio and still be able to meaningfully discuss
each of your ideas with you.

Does this mean I am missing out on good stuff? I have no doubt. The
quality of startups being created has never been higher. The caliber
of today’s entrepreneurs is staggering. But, if I invest too much time
in this account, it comes at the expense of the projects to which I
have fully committed my time, energy, passion, and money.

Thanks for understanding, and I wish each of you the best of luck with
your new venture!

Chris

Jason Calacanis gets a lot of stick. Most of it unfairly. He’s a good guy, works hard, treats his employees well and does his best. Whilst on occasions he is overly self congratulatory – he means no harm and I’m not sure there’s anything wrong with being your own biggest cheerleader.

Jason provides a ton of value to the startup community in the US and abroad, whether through his shows, the open angel forum or his email list. I met Jason for the first time in NYC a couple of months ago. He was very kind to me even though he had nothing to gain whatsoever. He took me to dinner and invited me to a Poker game with some of the top internet entrepreneurs in the world (there was at least $300m of exit cash sitting round the table). He was a mensch from beginning to end – something I wont forget.

I was very impressed with how he dealt with the latest bout of vocal haters who arose after changes to Mahalo’s TOS. He invited them onto a live broadcast of This Week in Startups and gave them ample air time to raise their concerns and explain their feelings. Credit to Jason for managing to disarm all of them and making the show enjoyable and informative for the rest of us at the same time.

When up and coming guys like us see how hard it is for the successful guys, how many trolls there are gunning for them, how many people bad mouthing them and wishing for their downfall we may tend to get disenfranchised about our own climb. We shouldn’t.

Salvador Dali said;

“The thermometer of success is merely the jealousy of the malcontents.”

and Elbert Hubbard;

” To avoid criticism, do nothing, say nothing, be nothing”

We’d do well to remember these when we have to face the compulsory backlash which entrepreneurs face when innovating.

Michael Arrington likes to quote Theodore Roosevelt’s 1910 Man in the Arena speech when telling people how to deal with critics and cynics. My favourite thought on this comes from Victor Frankl, Holocaust Survivor and author of the mind blowing book Man’s Search for Meaning who said;

“What is to give light must endure burning”

Think about that for a second. “What is to give light must endure burning”. This sentiment resonates because we feel its intrinsic truth.

Let’s not endure the burning, let’s embrace it. For whenever we feel we’re burning is actually when we’re giving light.

The Next Web published a review of my new startup Shoply.com

Brad McCarty did a sterling job in the post. I’m overjoyed that our first iteration made such a good impression and so many of the unique nuances of the software and offering came across.

It’s great to get such positive feedback from an early adopter and sophisticated user so soon into our journey.

My favourite quotes from the article are:

Shoply makes e-commerce easy and affordable for all.

Shoply simplifies things to the extreme. The clean interface has no room to be confusing

Shoply is going to disrupt e-commerce slowly but surely. Shoply is right on the border of very exciting things.

On becoming Prime Minister in 1940 Winston Churchill addressed his parliamentary colleagues in the House of Commons citing the now infamous quote

I have nothing to offer but blood, toil, tears and sweat

He was referring to the coming hardships which the ongoing WWII war effort would entail. He could very well though have been referring to what Entrepreneurship offers Entrepreneurs.

There is always a fire to put out, always something going wrong, always hard decisions to be made, always problems which need to be dealt with. Always easier ways to earn a living, always less stressful ways of being innovative and creative.

Whilst people always think about Entrepreneurs as being out to enrich themselves and money being the focal point of their endeavors – for me personally and probably for you too that’s just not right.
We want to make money, we want to be successful we want financial rewards – but if those were our only aims – we are capable and clever enough to do it using less brain power, causing less stress and working less hours than through entrepreneurial pursuits. Bankers, traders, hedgies – we could get those jobs, we could be successful in those pursuits – but we chose not to.

We chose a different path, a harder and harsher path, one less forgiving, one requiring a steeper and more hazardous climb. We choose this path for different reasons. For our desire to create, for our desire to innovate, for our desire to make things better, easier, fairer, simpler.

You see things; and you say, ‘Why?’ But I dream things that never were; and I say, ‘Why not?’” – George Bernard Shaw

By fulfilling a baser more intrinsic desire than something purely financial we have the strength and courage to keep going, to keep pushing, to keep fighting.

There are times, more often than not, that your startup offers your nothing but blood, toil, tears and sweat. Just remember why your doing what your doing. Buckle down and persevere.

They knew they were coming, they wouldn’t turn around, they didn’t have good intentions, they wouldn’t go quietly and they could broadcast to the world in real-time. Why did things end as they did, what could and should have been done better?

I’m not a politician/military strategist/PR or spin doctor but I see glaring errors in the strategy and tactics Israel used to deal with the Flotilla of ‘pacifists’ and ‘peace’ activists who tried to break the blockade of Gaza which ended so terribly for all concerned.

• Israel knew they were coming and had ample time to manage the situation militarily, politically and from a public relations perspective. Why didn’t she?
• Waiting for the Flotilla to clearly breach Israel’s territorial waters would have substantially reduced the initial political and public relations fallout from green-lighting the operation. Why was the operation carried out in International waters 60 miles out to sea?
• Israel had substantial legitimate reasons for maintaining the siege of Gaza and blocking the flotilla. Why wasn’t a public relations campaign mounted in advance of the operation? Making clear who was actually on board, what their consignment really contained and that Israel was prepared to deliver all humanitarian aid through existing land crossings and that attempting to breach the siege was solely political in nature and not humanitarian
• Why wasn’t a covert operation mounted to sabotage the ships (engine fault or similar) rather than employing a frontal combat operation with far higher risk of casualties on both sides? The same ends could have been achieved at much lower cost.
• Why wasn’t the broadcasting equipment on the ships jammed for the duration of the operation as is customary during military activity?
• Why weren’t the IDF and MFA press teams informed about the schedule of the operation so they could be on-hand to deal with the public relations fallout immediately by briefing the press and providing them with video evidence etc of the lynch mob on the ships and the numerous advance warnings given that the blockade would be enforced and the flotilla would be stopped come what may?
• Once decided to mount a commando raid on the ship why not deploy overwhelming force so that the activists were in no doubt that immediate and unconditional surrender was their only option?

These, and many other questions remain unanswered and probably will for some time.

What concerns me more than the mistakes made today is that this episode will only serve as the first of many more to come. Turkey have pledged to break the blockade of Gaza and will send further “peace” flotilla’s accompanied by war ships and fighter jets. The stakes have now been raised irreversibly. I worry for the future.