Build Rapport over Facebook

We believe that companies will increasingly compete on treating people excellently.

How do you treat people excellently? You respond to people quickly. You help people feel like they belong. You personally connect with people: you care about who they are, what they think, and what they do.

The trend is most visible in customer support, but it will not stop there. It will affect sales, business development, and every other way in which companies communicate. As a result, more of us will spend significant amounts of time building rapport with people. Many of us already do.

How do we establish rapport in an increasingly online world? It's simple: we interact with people on social networks like Facebook, Twitter, and LinkedIn. But if you're at all like me, you're too busy to go to multiple sites. This is why Rapportive brings your network into one place — your inbox.

Since our accidental launch, we've shown your contacts' recent tweets. With our LinkedIn integration, you can grow your network from Gmail. Today, we are excited to announce that we've integrated Facebook right into Rapportive.

You can add contacts as friends on Facebook. You can see their Facebook posts. You can see attached photos. You can 'like' and respond with comments. You can even watch attached videos. And you can do all of this without ever leaving Gmail.

Building rapport has never been this easy, or this much fun.

Enjoy!

Grow your network with Rapportive

We've never had more demands on our time, or more ways to spend it. It's never been easier to neglect things which aren't urgent, but which are good for us. Like eating well, exercising, or filing receipts. There is one other thing I regularly forget to do: grow my professional network.

We all know that relationships matter. Networks like LinkedIn can remember all of our previous colleagues, and can track what they're working on now. This could be an invaluable resource for every one of us. But for me, it doesn't quite work: my LinkedIn network does not represent who I've worked with. I rarely remember to go to LinkedIn and update my network; when I do, I forget to connect with everybody that I should.

LinkedIn is great at knowing your network, but it's not great at knowing who to add to your network. That's why we've integrated LinkedIn into Rapportive. You can now add contacts to your LinkedIn network without ever leaving Gmail.

To add a contact to your LinkedIn network, just click "Connect" in their Rapportive profile. You can enter a short message, click send, and you're done. When your invitation is accepted, your contact's profile will show that you are connected.

This is the kind of feature we love to make: it not only saves time, but also quietly reminds us to do something worthwhile – at precisely the moments when we're ready to do it.

Will Freemium Work for You?

Ruben Gamez says freemium doesn't work. Yet Dropbox, MailChimp and Evernote say freemium does work. So, does freemium work or not?

This is the wrong question. The right question is: when does freemium work? [1]

The business model for Rapportive (which adds rich contact profiles to your email) is simple: build an amazingly useful product, and charge money for it. It will most likely be freemium: a base version of Rapportive will always be free, and there will be a premium version which costs money. We think that this strategy will work for us.

But why? What signals indicate whether freemium will work? I think it depends on many things: the type of product you have, the kind of company you want to build, and more.

10 questions to consider:

  • How do users feel about your product, as a function of time?
    Products which increase in value over time are good candidates for freemium.

    Neil Davidson has a good illustration of this.

    Do users love your product for a short while, and then get bored of it? (casual games) Are they oblivious to it most of the time, but occasionally desperate for it? (data recovery tools) Do they always dislike it? (virus scanners) Or does it gradually get more useful over time? [2]. For example, a tool which recovers corrupted photos from your camera is unlikely to work as freemium (cameras can corrupt files, but it happens rarely), whereas a tool such as Evernote works well as a freemium (it becomes more useful over time as you enter more data into it).

  • How good is your long-term retention?
    With good retention, you have a better chance of converting free users to paid users.

    Your product may become more useful over time, but if a large proportion of free users stop using it after a while, that's bad news if you were hoping to convert them to paying later on. In that case, you should probably ask them for money early, while you still have their attention, or improve your retention! However, if a large proportion of your free users stick around for a long time, and your product becomes more useful over time, more and more of them will eventually convert from free to paid.

  • Does your product require behaviour change, or can people start using it gradually?
    If people can start using your product gradually, freemium might work.

    For example, an image editor requires an abrupt change of behaviour: you've got to stop using the old one and start using the new one. In that case, charging all users from day one may actually help you: by having spent money, users are more likely to also spend the time learning how to use the new application (due to the sunk cost fallacy), and thus end up getting more value from the product. On the other hand, if your product doesn't have a big learning overhead and users can gently start using it, it may be better to charge for it later.

  • Does your product have distinct modes of use for different audiences?
    If it does, you can be more creative with your freemium model.

    I am fascinated by Yammer's business model. They get lots of people in an organisation to use it for free; then sometime later, when there are lots of active users, they sell the enterprise IT department on stuff like data ownership, admin controls and security tools. The end-users who sign up do not care about the admin features; the IT department does, and they are a separate audience. This is an interesting take on freemium: always free for end users, always paid-for for IT departments doing their job.

  • What is your market like?
    If you are targeting a large unmet need, you should make your product free.

    When faced with a wide open field you should be in land-grab mode, and acquire users before your competitors do. On the other hand, if you're in a well-established market, you'll need to gradually convince users to move away from their existing solutions. In this case, charging money is the best way of finding customers who care enough about the problem that they are willing to pay for a better solution.

  • Are you targeting a premium niche?
    Free users are the opposite of premium.

    Sometimes free users are more troublesome than paid users (for example, MailChimp was faced with a spam problem when they started offering a free plan). If you are going for the top end of the market, giving something away for free may hurt you more than it benefits you. The price of your product says a lot about your positioning, and people tend to assume that if something is free, it's less valuable than something expensive.

  • Which metric do you use to separate free from paying users?
    Freemium makes sense if there's an obvious point to start charging.

    Do your users need to pay when they exceed a certain number of seats, credits or widgets? Picking a metric is tricky, and is a topic worthy of a separate blog post. Number of seats is a common metric, but it only makes sense for applications where there's a downside to everyone using the same login. (For example, if your application is an analytics dashboard, it doesn't really matter if there's one shared login or each person has a separate login.) If there is no obvious metric which separates free from paying users, you should probably charge everybody.

  • Do you depend on word-of-mouth marketing?
    More users (even if they are free) = more mouths.

    If yes, note that more people using your product means more mouths to spread the word. You still need to reach the right kind of users, so the question is: can you reach people who will pay, through the word of people who will remain forever free? My guess is that if you're targeting a specific niche, word-of-mouth spread and willingness to pay are strongly correlated (which suggests that there is little benefit in having lots of free users); if you're targeting a broad audience, the two are uncorrelated, so free users can help you carry the word to people who will pay. [3]

  • What kind of company do you want to build?
    You need lots of users if you want to take over the world.

    If you've taken venture capital and want to take over the world, you need to grow quickly, even if it means leaving revenue on the table. If you want to grow organically and maximise profits, you're better off maximising revenue per user, and ignoring those users who would never pay you anyway.

  • What are your costs per user?
    They had better be low if you have lots of free users.

    Are your costs fixed (developers, testers) or variable (servers, support)? If your variable costs are low enough, it's fine to have a low conversion rate, because one paid-for user may pay for 1,000 free users. Support for free users is often the limiting factor. To keep your support burden low, you'll need to make your product easy to use and fix all your bugs... but that's well worth doing anyway!

So why does Ruben say that free plans don't work? Well, for his situation, I think he's absolutely right. Let's consider the above questions for Bidsketch.

Bidsketch a workflow tool for designers: it's immediately valuable and then probably stays this valuable over time. It requires a change of behaviour: stop using email and start using Bidsketch. It has two distinct modes of use (one for designers and one for clients), but it seems pitched at one audience (designers). It competes with email, a well established solution. It seems to target a premium niche of the best freelance designers; this is not a tool for everybody. Ruben is self-declared Micropreneur who wants his business to grow organically. And because he's working by himself (as far as I can tell), the support burden of free users would be significant.

So I agree: freemium is not right for Ruben's product. But it might be right for yours.


Footnotes

[1] This is a popular failure mode for online discussion, and a pet peeve of mine. 14 months or so ago, the NoSQL community was squabbling about "mine is better" – "no, mine is", so I contributed a post explaining when you should use which type of database.

[2] Phil Libin, CEO of Evernote, gave an excellent talk on Evernote's business metrics in May. It's packed with great insights for products which gradually become more useful over time.

"Every month, the longer you use [Evernote], the more valuable it gets. And since the long-term retention is flat, and the conversion goes up, what you see is: the longer a cohort stays, the more valuable they become." (at 14'55")

Examining the cohort of users which signed up in March 2008, Phil found that after 3 months, they were making $300/month from 11,000 people (a conversion rate of about 0.6%); 22 months later, they were making $8,000/month from the same 11,000 people (a conversion rate of about 16%)!

"Users are kind of like a nice wine, or a stinky cheese. As [a cohort of users] ages, it actually gets better. A lot of the people who wouldn't pay leave, and a lot of the people who stay end up paying. Even though there's no hard sell, and you can use Evernote forever for free, a much larger percentage winds up converting." (at 17'05")

Of course, not every application increases in value to users over time.

[3] Rapportive has broad appeal and is not limited to a specific niche, so it makes sense for us to have lots of free users. When Brad Feld recently said that he was trying Gmail, a chorus of our users jumped to recommend Rapportive to him. We wouldn't have got that without lots of people using and loving our product.

Effortless Scheduling with Tungle.me

Scheduling a meeting shouldn't take longer than actually having the meeting. Yet we spend so much of our time playing calendar battleships. Back and forth our emails go, trying to find that one precious hour where fates, stars and calendars align.

Calendars are great for remembering meetings, but they don't help you arrange meetings. That's why we've integrated Tungle.me into Rapportive. Tungle.me makes scheduling easy.

To schedule a meeting with somebody who uses Tungle.me, just click "Schedule" in their Rapportive profile. Their calendar will appear, showing only the times when they're available. You propose some times, enter a topic, and you're done.

If you already use Tungle.me, we've done some magic: your account will automatically show up in your Rapportive profile. Just make sure you've made your Tungle.me page searchable, which you can do from your Tungle.me account settings page. If you want to use Tungle.me to help you manage your calendar, you can sign up at http://tungle.com.

Why wasn't it always this easy?

The Accidental Launch

We accidentally got 10,000+ users in 24 hours, and funding from Y Combinator just a few days later. This post tells that story.

We were determined to take part in Y Combinator, so we spent weeks crafting our entry and polishing Rapportive. At the start of March, we were finally ready. We held our breath and clicked "Submit". We looked at each other, relaxed, and slowly started to breathe again. A few hours passed uneventfully. We were in no way prepared for what happened next.

Somehow, the press had found us. TheNextWeb ran the first piece. ReadWriteWeb picked it up after that. Then Lifehacker. Then WebWorkerDaily. We had headlines like: "Stop What You Are Doing & Install This Plug-In." Our twitter account was aflame with thousands of mentions in just a few hours. We had accidentally launched.

We saw our user count grow from 5 to over 10,000 in 24 hours. I had a case of beers in my drawer in case we ever needed to celebrate anything. We drank all of them.

I stayed awake for two days straight: the emails didn't slow down, the tweets kept pouring in, and new Skype chats would appear as soon as I'd finish old ones. But we were determined to quickly respond to every single last email, tweet, and chat, so we soldiered on.

The next day, investors from across the world started contacting us with offers of funding. These weren't just any old investors; these were some of the best angels and venture capitalists in the world.

We didn't have time to wait for the normal Y Combinator interview, which would have happened a month later. I contacted Harj, Venture Partner at YC, and they offered to do the interview over Skype. (I vaguely knew Harj from our university days — it's a surprisingly small world.)

A few days later, Martin, Sam and I were huddled around around a laptop talking to pg, Jessica and Harj. They weren't quite as huddled, so we spent most of it talking to pg's legs. We talked for half an hour, but I felt like it passed by in an instant. A few minutes later, we had our answer: Y Combinator would fund us!

We celebrated in the traditional British manner. When we were next coherent, we booked a fundraising trip to the Valley.

Lessons Learnt

We did several things that worked well during this phase:

  • Offer surprisingly great service. Most companies deliver terrible service, and users have come to expect it. Surprise them. Make it abundantly clear how users can contact you. Monitor all your channels. Respond to people as soon as you physically can. Thank everybody and go the extra mile. I personally find that it really helps to smile, even when the user is thousands of miles away and on the other end of a tweet. We use a shared Gmail account for email support, and CoTweet for twitter. Our YC batchmates rave about Olark.
  • Use a feedback forum. Make the forum really easy to find. Include links to it from your product. Make the links especially visible when the product isn't working properly. If your forum provides single sign-on (so users don't have to create new accounts) then use it! We use UserVoice and have fallen irrevocably in love with it.
  • Release early. We didn't choose to release early: it was a complete accident! But in hindsight it turned out to be very useful. Our feedback forum rapidly filled up. We quickly learnt peoples' likes and dislikes, and prioritised building what people want. If you don't release early, then you might build the wrong thing and you won't find out until much later. Even if you build the right thing, somebody else might build it first and steal your thunder. So get out there.
  • Be ready to scale. You never know when traffic will hit. Now I realise that "be ready to scale" may sound like classically bad advice, but cloud computing has changed the economics. You can be ready by simply choosing the right hosting provider. If we were on a cheap VPS, we would have crumbled to pieces like Cobb's limbo in Inception. As we were on Heroku, we could simply increase the number of dynos. I still vividly remember when our traffic hit. I was away from my desk, so I reached for my iPhone and dialed us up to 20 dynos using Nezumi. A few seconds later, we had scaled.
  • Build for the press. It turns out that Rapportive works exceedingly well for technology bloggers, because they spend so much time corresponding with people who have significant online presences. It is not worth building functionality only for the press (unless, of course, they are your target market), but it is worth being aware of this effect.
  • Build early. This advice is specifically for companies applying to Y Combinator: start as early as you can, as the deadline will come soon. The most impressive thing you can do is make something that people want.

One of our favourite books is Founders at Work, a collection of interviews with founders about their early days. We're now collecting stories of our own, which we will post in a series, Rapportites at Work. This post is the first of the series.

Update: It turns out @plc tipped @zee, which sparked off all the press — thanks Pete :D

Jobs: We are looking for a talented developer to join our team.  Could it be you?

10% of your emails aren't from real people

Email can be a pretty painful experience. We all get a ton of emails; some of them are personal messages from real people, some are notifications sent by a service, some are newsletters. Some are important, others less so. Some are from people or companies you know well, some are ones you barely know.

What we're trying to do with Rapportive is to make email a better place. Part of that is to help you figure out what to do about a given email, and to help you do it. And a quick look at the feedback forum shows that our wonderful user community has plenty of ideas on how to make email better. This blog post is the story of one of those ideas.

One of the most popular ideas on the forum has been "Display an informative and helpful profile when companies email me". To give a bit of background: when you get an email, Rapportive tries to find the sender on various social networking sites, and gives you a summary of that person — their photo, location, job, recent tweets, LinkedIn profile; whatever they have chosen to make public.

However, that only works if the sender is an actual person.

We looked at our statistics, and saw that about 10% of profiles looked up by Rapportive users are for senders like noreply@example.com, support@company.com or notifications@someservice.com. (That's counting distinct sender addresses, not the number of times they looked up, which is probably even higher.) For these profiles, we simply had nothing to show — pretty lame. That had to change.

So we built a bit of cleverness into Rapportive: when we spot an email address which looks like one of the above, we grab a copy of the website of the company sending them. For example, if the email came from noreply@apple.com, our servers will go to www.apple.com, pick the parts which seem the most interesting, and put them in your sidebar in Gmail. Before and after this change:

It's not perfect — for example, the link to "iPhone" was picked up as "IPhone", with an uppercase "I" — but we think it's still pretty useful. For example:
  • When you get an error notification from a company, click the "Support" link in the Rapportive sidebar to go directly to that company's customer service.
  • When you get a message from a service you use, go directly to their blog to check if they have said anything about the upcoming feature you are waiting for. Or maybe they have some interesting upcoming events?
  • When you get a marketing mail from some random company and you can't remember signing up to their newsletter, check their website summary in the sidebar to decide whether it's interesting to you or whether you want to unsubscribe.

If you send emails using an address like noreply@yourcompany.com, check out the advice from Ben Chestnut at MailChimp — do you want a more personal or more corporate feel? If you want to edit the profile for an email address, Andy Gambles describes how. And if you don't like what Rapportive has done for your address, just drop us a note at support@rapportive.com and we'll change it for you.

By the way, if you're technically inclined, we even made some of the code behind this feature freely available. And if you're a talented code craftsman and these sound like interesting problems to work on… we're hiring :)

We've got lots more exciting features coming. Follow us on Twitter for updates!

Down at the Open Angel Forum

After launching in March, attracting 10,000+ users on the first day and many more since, MartinSam and I decided to raise seed funding for Rapportive.

Anybody who has raised funding knows that it can be very time consuming. The best investors will significantly improve your chances of success, and can even rescue you you from dire straits.  But even with a strong personal network, it can take a very long time to schedule meetings with the good and the great. That is, until Jason Calacanis started the Open Angel Forum.

The Open Angel Forum puts 6 promising start-ups and 20 hand-picked angel investors in the same room as steak, wine and beer (the precise details may depend on your location). After everybody is suitably lubricated, each start-up pitches for 5 minutes and takes 10 minutes of Q&A.

The angels are stellar. We were in Silicon Valley, where the OAF boasts Dave McClure and Shervin Pishevar as chapter heads, and where the membership created or funded some of the world's most successful technology companies. These folks are the real deal. Don Dodge puts it best: “This is an invitation-only group, and these angels all write cheques.”

I am bullish on the OAF: it works. If you want to raise funding, and you are ready, then you should immediately apply. There are currently events in San Francisco, Silicon Valley, New York and Boulder, and there’s rumours of chapters in London and Israel.

Thanks again to Jason, Tyler, Dave and Shervin for putting on such a good event.  It works!