Category Archives: Competition

Help Us Win A Contest!

We have entered a PayPal Developer’s Contest. First prize is $50,000 cash and $50,000 credit from PayPal. As you know, startups can ALWAYS use money like this and we need your help to get it.

To win, we need you to vote for our demo in the contest before 11:59 PM Friday night, March 5th. Sounds easy, right? It is.

You need to have a PayPal account to participate. If you don’t have one, click here and you can set one up. Pick Personal. It is fast, easy and free.

Once you have your PayPal account, click here or on the screen shot below to be taken to the contest. The first screen will look like this:

Click on the VOTE NOW link to start. You will be prompted to login to PayPal. Honest, this won’t take very long…

Enter your account name and password and then click Log In. If this is your first visit to the PayPal Developers Network, they will automatically redirect your browser to a screen like this.

Please enter a screen name (usually in the format firstname.lastname), check the Java and Social networking boxes and click Submit. You will then be directed to the contest page (finally!) shown below.

Please enter our contest entry number D1039 in the search box in the top right corner and click Search.

You will see our video demo (entry) into the contest on a screen like this:

Please click on the Vote button in the top left corner and you are done!

Except, of course, if you really want to watch the video. If so, click on the Play icon in the middle of the screen.

Please send us your feedback on our (very short – we were only allowed 2 minutes) demo. We’d love to hear from you.

Thanks for your help!


Competitor = fool

Some days I marvel at the many executives who seem to be successful (at least for a time) in spite of their lack of critical thinking. We have an excellent example this week in Terry Drayton, celebrated CEO of Count Me In, a competitor in Bellevue WA. Terry is making the media rounds apologizing for losing $5,000,000 of his customers’ money. He either made the mistake or allowed the mistake to be made of co-mingling operating funds for his company with the funds paid to the company to be held in trust for his customers. It may not have become such a massive issue except for the fact that his company was losing money and therefore “lost” the money that should have been dispersed to his customers. He discusses the issue and takes full responsibility for the error in this article. I doubt this apology will get him through the multiple lawsuits the company is facing.

I’m happy to say that, coincidently, I talked with Bill Diamond about setting up the proper trust account structures on Monday night and mentioned it to Natalie yesterday even before I read this article. To me, this is a obvious thing to do but it appears that it is not obvious to others. I’m going to make sure that we highlight that our customers’ funds will be held in trust and segregated from our own funds. We will try to use this as a competitive advantage over others who may be making the same mistake as Count Me In.

However, I’m concerned that the media coverage and word-of-mouth rumblings over this incident will make customers reluctant to use services like ours. Trust broken is difficult to recover and one bad apple in an industry can have a major poisonous effect on the business of others, at least for a while. We’ll tackle this proactively but with the margins we work with we have to hope that it won’t be a major barrier to acquiring new customers. We simply don’t have the luxury of applying additional sales pressure to sell around or over the objection. In spite of this possibility, I’m comfortable that our multi-niche market strategy (sports teams, political fundraising, clubs, school groups, etc.) will help mitigate the impact of this incident on us.

There are a couple of good pieces of news that have come to light from all this.

First, Count Me In has processed $175M dollars of fees over the last seven years of operations. This equates to, on average, $25M of business volume per year. We believe we can be profitable at less than $25M per year.

Second, they currently process well over 25,000 registrations per month. In our model, this would equate to 1,000 team sign-ups per month and is in the same range as our required business activity to generate the net profit that would allow us to sell the company for over $20M in our fourth or fifth year.

To me, these two numbers show that our forecast and business model growth projections are realistic. We just now have to make it happen…

Getting real in an on-line world

Windows Live is taking everything on-line, live updates, real-time data and software updates, as well as their entire customer base, that’s pretty huge. And it will buck a trend to get other major and minor organisations to do the same, if they’re not already. Gone will be the days when you go in to physical shops to buy new and updated products, all of it will be available to download on-line for a fee and receive instantly – for technological products definitely.

In that sense it all bodes well for us as that’s where our business is. As more people become accustomed to moving their daily lives on-line – making e-payments, sharing content, information, personal and group details, become more proficient at using tools and applications, it becomes second nature to them.

Facebook is not our only portal and the more that continues to get developed by way of platforms we can embed ourselves on, the better. That’s why I’m particularly focused on getting and staying real, as are 37signals, summarising their thoughts on the matter: Getting Real is about out-sharing, out-teaching, and out-contributing the competition.  Continuing to build an audience through teaching, sharing, and contributing back to the community. Write, tweet, and speak wherever you can. An audience you’ve taught is far more loyal than a group of people whom you’ve only been able to reach by spending.

So whilst our business is on-line, our customers are also in the real world and we need to stay connected to them at all costs by creating the FundRazr community.

I also believe, now, more than ever we need to stay small, focus on just a few core things at a time, quick wins, eliminating abstractions that lead to miscommunication and complexity, and only do what we need to do instead of everything we could possibly do. It’s hard when you’re a big picture thinker not to want to take on the world and offer a solution to everyone’s wants and needs. But in this case, delivering to our key target markets, and delivering an excellent product is what we want to achieve….for now.

Microsoft’s answer to Facebook…

… went live this morning.

Microsoft has enhanced Windows Live, their portal for running Microsoft applications “in the cloud”, to include social networking features similar to Facebook. This is potentially a big deal for them given that they are leveraging the 268 million users of Microsoft Messenger, their popular instant messaging client, to populate the service with a user base. In comparison, Yahoo has 116 million users for Yahoo Messenger and Google has only 6 Million for Google Talk. At this point, Facebook has somewhere north of 130 million users. I expect that Microsoft will use these numbers to claim bragging rights to the world’s largest social network i.e. they are at least twice the size of Facebook.

Unfortunately for us, this doesn’t help the situation very much – confusion and competition dilute the energy and focus that Facebook has experienced so far. Microsoft will gather some press coverage for this new strategy based on their angle that this is helping them realign themselves to the Web 2.0 world. However, it isn’t really a social network in the same context as Facebook. This is mainly from a perception point of view; it has many of the same features but users don’t look at it in the same way. Many users have a big investment in their Facebook profiles and will be reluctant to move them over to Microsoft Live.

One big thing that may bring them over is the fact that Microsoft is also delivering quite a few rich content application through their Live service. Users can use an online version of Microsoft Word, a calendar, online storage and, of course, Messenger. Time will tell if this is enough to pry user profiles free from Facebook.

Another day, another competitor

Just when we think we’ve drained the swamp and found all the alligators, another wave washes over the wall and someone else lands flopping around on the ground. The latest victim:

The good news about this is there is obviously a market for this stuff. The interesting question is why are none of these vendors besides very strong with even Active struggling to hold onto their customers.

I think the answer comes down to three things: focus, price and control.

All the existing vendors focus on managing every aspect of team communication and engagement. This is a huge topic when you consider the number of sports and the variations between them. It is very expensive to develop software like this but more importantly very expensive for someone to learn how to use. Our target market is already short of time; they are busy people BECAUSE they are involved in sport. They don’t have time to learn all the ins and outs of a new software package. A focused, simple, easy-to-use solution like ours is very competitive.

A second reason I think our competitors struggle is their business models are based on subscription fees AND high transaction costs. It takes a sales effort to convince a small team to spend $60 a year up front on an online service. This fee is required because the development effort to build out all the team management features is very expensive. The existing vendors also charge for transaction fees which doubles up the perceived costs. The up front fee is a barrier to adoption that is keeping these vendors from gaining more traction. Our model is based only on transaction fees and by keeping our costs of operations low we can continue to have a price / cost advantage.

The bigger issue in all of this (in my opinion) is that people don’t want to use all the team management features because it requires their team members to go to yet another web site to check on the schedule, make payments, etc. It also requires the team management get sucked into spending a bunch of time putting information into the web site that is “nice” but not “necessary”. In our model, we make it easier to set up a team website by leveraging all the tools inside Facebook (like Facebook pages with its photo uploading, chat boards, email, group membership tools, etc) for the “nice” information. Our tools manage the “necessary” information. This allows the team leadership and the team members to stay within the same environment most of them visit daily or at least a few times a week. This is a huge convenience factor.

Time will tell if our approach will achieve better adoption rates.

Faith, Hope and Charity, Charity, Charities

If there is one trend that has come out in the last year, it is the number of people trying to use the Internet and Social Networking to raise money for charitable causes and create a business for themselves in the process. While sports teams and clubs are our main focus, charitable giving to these groups (aka fundraising) is still important.

On that note, we’ve discovered a new local company in the online charity tools space,, that looks interesting and has ideas we should look at. It appears they have a similar technological focus as ours i.e. using social networks to improve the exposure of the money collection tools to the communities associated with a person or cause.

The old saying is “Great minds think alike but fools seldom differ”. Either we are both on the right track or both heading for trouble. Given I think it is the former it is nice to have validation from another company.

Competitive pricing (good) news

The angel investor we met on Monday, Bob Okabe, is director and investor in, a team registration service. In researching their offering I’ve discovered that their fees are between 5.5% and 6.5% plus a $1.00 per transaction charge.

In my last post, I expressed my worry that our customers won’t pay our fees on large size transactions. However, their ( fee structure is even higher than ours. Given that they have been in business for almost ten years their business model must work in some fashion.

We will continue to do the work to understand our customers’ price sensitivity but this information gives me lots of comfort that our business model is fine.