Back of Mind

My Little Corner of the Web
Welcome! Bryan Birsic here. I talk about startups and life here, mainly. For less developed ideas and killer links, follow me on Twitter @birsic. For my sanitized professional journey, see my LinkedIn page.

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  • November 1, 2013 5:31 pm

    An Old Path to Employment for a New Labor Reality

    This is THE LAST POST in my 20 Startup Ideas in 20 Days series with Chris Ricca, aka Startup Pitch October, aka Startup Idea Cage Match.

    Idea #20: The 21st Century Apprenticeship

    Vision & First Principles:

    A new path to education has been blazed in the last decade, and is poised to revolutionize an education system designed for The Industrial Revolution. From MIT OpenCourseWare (which really kicked this party off) to iTunesU to Khan Academy to Skillshare, anyone with an internet connection can today access education resources only available to a select few, at great cost, just a few years ago. This utopia of inexpensive digital learning has run squarely into the reality of the labor market, however. And the reality is that most employers continue to rely on degrees from branded institutions in the hiring process. In other words, you can now learn anything you want to online, but you can’t get any credit for it with an employer.

    Online providers have responded to this with course credit offerings, however they are force-fitting an old approach into a new paradigm. The enormous power of digital, inexpensive, high-quality education is not that someone in college can digitally supplement their credits, though this will put much-needed downward pressure on college affordability. The real magic of these new education resources is in tapping the potential of those for whom formalized learning is impossible. In making advancement through learning achievable for those unable to access still-pricey, time-intensive, one-size-fits-all degree programs.

    I see the solution to this impasse in an old Economics insight about education: that it has both signaling value and “real” value. What does this mean? Basically, that when you go to Harvard, there’s actual value in the additional information and skills you acquire, i.e. you’ve increased your productivity. This is the “real” value. But there’s also value in the signal that your attendance at Harvard sends to employers. Said another way, you could go to Harvard, learn nothing, and that “education” would still create a lot of value for you in the labor marketplace. Conversely, you could be Will Hunting. This signaling value exists because it’s difficult and inefficient for each employer to assess four years of education. It’s much easier to allow Harvard to signal, in the form of a degree and a GPA, that those four years were well-spent.

    The solution, then, is to eliminate the signaling value of a degree by making the “real” value of an education as demonstrable and accessible as possible.

    Early Product Ideas:

    With all of the Economics talk, I’ve made this sound more complex than it needs to be. In fact, the concept is an old and simple one, and still in widespread use today. A portfolio of work is nothing but “real” value. Here is the quality of my work. See for yourself. No signal from a third-party is necessary. Artists of all types have been using portfolios for centuries. Today, this extends far beyond artists: programmers effectively build portfolios via contributions to Github, all variety of expertise is demonstrated in forums such as Quora, even Twitter has become a resume of sorts for many.

    Despite this, the portfolio approach of demonstrating expertise has a serious limitation: many are not able to share their work. A lawyer cannot publish his briefs. A consultant cannot share work done for a client. A marketer cannot detail for competitors successful strategies pursued.

    What I have in mind to overcome this confidentiality challenge, and provide a path to employment for those without the “right” signals, is a task marketplace in which the employer’s obligated to provide resume-building review. In other words, to turn labor marketplaces like MechanicalTurk and 99Designs from a downward spiral of labor commoditization to an upward ladder of economic advancement.

    I imagine it would work something like this: You learn a new skill, you find and complete tasks in this marketplace with this skill, you’re provided publicly-shareable feedback on your performance, and then you’re prompted with resources to improve (if feedback is negative) or move up the ladder of expertise (if positive). Rinse and repeat until you have sufficiently advanced and/or proven your expertise to get credit for it in the labor market.

    In a way, it’s 21st century apprenticeship: fragmented, remote and recorded.

    What Would Keep Me Up:

    As often discussed, building two sided marketplaces presents an enormous challenge from a standing start. Finding the right initial vertical, along with the right early employers and participants, would be critical. Even if one succeeded in building a marketplace, employers may not change hiring practices to value work-product portfolios.

    Passion Quotient:

    We’re talking about nothing short of unleashing the potential of millions of people who have little or no access to the master key of the current labor market: the branded degree.

    Paying The Bills:

    As the middleman between employers and participants, capturing a small percentage of payments would generate an immediate revenue channel. In addition, recruiting tools would provide a lucrative opportunity as employers increasingly use the product to discover undervalued talent.

    In Short:

    We’re experiencing a revolution in the way we educate, but haven’t seen a corresponding revolution in the way we hire. Moving to an approach based on demonstrated work, instead of degree signaling, levels the playing field and opens the labor market to millions for whom it has to-date been inaccessible.

    Vote!

    Check out Chris’s idea today and vote on which is better!

  • October 31, 2013 4:49 pm

    Getting Your First Enterprise Customers Right

    This is post #19 in my 20 Startup Ideas in 20 Days series with Chris Ricca, aka Startup Pitch October, aka Startup Idea Cage Match.

    Idea #19: Database of Early-Adopting Enterprise Customers

    Vision & First Principles:

    Getting the right first customers can be the difference between success and failure for a fledgling enterprise product. We lucked into some great early customers at SimpleReach, and they were instrumental in informing our direction and providing market validation. What makes for a great early customer? At root, it’s an embrace of the pros and cons of working with a startup. A customer who understands that the rapid iteration a startup can deliver also translates to more frequent bugs and downtime. A customer who knows that having a high-touch and consultative relationship with a startup’s most senior people also means there’s probably not a dedicated support team. A customer who sees that taking the time to provide thoughtful feedback also provides them an outsized impact on the next big product push. Having this type of customer early in a product’s life, who embraces the good and the bad of being an early adopter, is absolutely critical to finding a footing in the market and garnering high-quality feedback.

    Despite their importance, finding these customers is difficult and inefficient. At the start, I wasted many cycles at SimpleReach pursuing customers who didn’t want to make the tradeoffs above. (A piece of advice: flexibility on support requirements and downtime tolerance are good proxies for startup friendliness.) As the importance of where a company likes to live on the adoption curve became more evident, I began to gather more information. I traded notes with fellow startups pursuing similar customers, took notice of customers’ experimentation and speed-to-market in their own business, and identified groups and people within customers that drove internal innovation. I ended up developing a pretty solid understanding of our market’s adoption curve preferences, however it took a long time and a ton of work, and I’m sure I still had incomplete and incorrect information. Not to mention, that knowledge set is becoming more dated by the day.

    To improve this process, I envision a product that maps the landscape of customer adoption preferences and related information, with a focus on matching new products to early-adopting customers.

    Early Product Ideas:

    The big challenge will be gathering and maintaining accurate product adoption data on a wide swath of customers. I suspect the best information will come from startups that have worked recently or are working with a customer. Though my experience at SimpleReach suggests that companies are happy to trade this information, competitive concerns will need to be addressed, likely through industry categories or custom-built “black lists”. It may also make sense to establish a contribution-for-access mechanism.

    Though knowledge trading between startups will be critical, allowing customers to build their own profiles may provide more accurate information than a self-review often would. Customers have as much incentive as startups to not waste time on poor fits and to push conversations into the best internal channels. Moreover, and startup ecosystem perspective aside, there’s nothing inherently bad about being a late adopter. One would hope it’s a deliberate choice.

    From this base of information, there are expansion opportunities into a more active matching and introduction role, and a variety of data services to both startups and customers.

    What Would Keep Me Up:

    Providing sufficient incentive for very busy startup people to contribute information would be an enormous product challenge. Without regular contribution from a large number of startups, this product loses much of its value.

    Passion Quotient:

    Despite not being of the world-changing type, I see this as a cause that startup folks would embrace. First, they’re likely to have faced this problem and can see the value in solving it. Second, it gives a great product a better chance of reaching those who will appreciate and advance it.

    Paying The Bills:

    Though you may be able to charge an access fee to startups and/or customers to participate, I think you leave the basic product free to facilitate more information sharing, and charge for additional services. As mentioned above, I see a variety of interesting data products flowing out of this database for both customers and startups. E.g. for customers: information on new relevant products, position relative to competitors, feedback on interactions with startups (your IT team is a pain, your contracts take forever, etc).

    In Short:

    Working with a startup on a new enterprise offering is a very different experience than purchasing a product from an established company. It’s closer to a partnership than a transaction. Helping startups to identify and navigate the right early partners would provide enormous leverage to these teams.

    Vote!

    Check out Chris’s idea today, Let’s Fix Medicine, and vote on which is better!

  • October 28, 2013 5:27 pm

    The Most Important Person to Your Success Who You May Be Ignoring

    This is post #18 in my 20 Startup Ideas in 20 Days series with Chris Ricca, aka Startup Pitch October, aka Startup Idea Cage Match.

    Idea #18: Making Mentorship Work Better

    Vision & First Principles: 

    One of the most important lessons I’ve learned, and continue to learn, is that you can’t do it alone. Or, I don’t know, maybe you can. But I can’t. I need great people helping me. To poke holes in my thinking. To expose my biases and assumptions. To pick me up when I’m stuck and flailing.

    And in the most critical of professional crossroads, and some not so critical, I’ve found that a group of mentors can be singularly invaluable. I’m not talking about a person you’ve worked for or are friendly with, and who you could say “mentors” you; I’m talking about speaking regularly with a person you respect in your field, who has agreed to be a champion, sounding board and counsel in key situations. For example, I had to ask Eddie to give me three additional days to respond to his SimpleReach offer because I wanted to get the perspective of all of my mentors. That was one of those invaluable times for me.

    However, I haven’t always invested in mentors, even after I began to realize their importance. It’s hard. There’s no easy way to initiate mentorships, no sense of what they’re supposed to look like, and no place to manage them. This could and should be easier. 

    Early Product Ideas:

    Here’s what I see being helpful, I think…

    - Standardize the relationship: Provide guidance for those unsure of what mentorship looks like. Make asking for it easier. Establish the frequency, format, and expectations.  

    - Make the relationship work better: Send an email when you’re overdue for a talk. Prompt for a few bullet points beforehand to spur mentor thinking, or to-dos afterwards to improve tracking and accountability. 

    - Discover new relationships: Simple profiles and search would create a new way to find great new mentors. It may even take the character of a niche social network - information sharing, conversation.

    What Would Keep Me Up:

    Though this does happen IRL, it’s a fairly aspirational, niche activity. It most definitely violates the Seven Deadlies rule. 

    Passion Quotient: 

    For those that have benefitted from having quality mentors in their lives, making those relationships more accessible and functional would be ample fuel. 

    Paying The Bills: 

    I’ll say freemium features, but frankly I’m not sure what they’d be. I don’t like the idea of opening this network to advertisers or recruiters. It’s an intimate relationship.

    I’m going to lean on the “if you create a ton of value, you should be able to find a way to capture some of it” crutch and punt on this one.

    In Short:

    The tumultuous seas of our professional experience benefit hugely from the perspective and empathy that mentorship provides. Encouraging more of these ties and helping them succeed seems a worthwhile effort.

    Vote!

    Check out Chris’s idea today, See Your Friends More, and vote on which is better!

  • October 24, 2013 3:42 pm

    Fixing Our Most Broken Industry

    This is post #17 in my 20 Startup Ideas in 20 Days series with Chris Ricca, aka Startup Pitch October, aka Startup Idea Cage Match.

    Idea #17: Reforming the Prison Industry By Changing Their Incentives

    Vision & First Principles: 

    The U.S. prison system is nothing short of disastrous. We have the highest incarceration rate in the world, a rate which has more than quadrupled since the 1970s. Recidivism rates remain stubbornly high. Prisons are overcrowded and violent. And yet, prison revenues and profits continue to grow. We can do better.

    Here’s what I have in mind: a procurement and tracking middleman between the government and private prisons to reward outcomes that are positive for society, and discourage outcomes that are negative. This sounds obvious, however is far from how this industry operates today. We want prisoners to be released as soon as they can productively and safely rejoin society; prisons make more money the longer that prisoners stay. We want prisoners to improve and retrain themselves to become contributing citizens; prisons make more money in a society with higher recidivism, and see increased costs with training. These distorted incentive structures make for an inevitably poor outcome.

    Although the rise of private, for-profit prisons has been decried in many circles, in response to e.g. their lobbying efforts to push for stiffer sentencing guidelines (see above incentives), that they’re separate from the government and respond to monetary incentives is a great help in this effort.

    Early Product Ideas:

    What I have in mind is relatively straightforward. First, you develop a procurement product for government buyers to more closely align societal and private prison incentives. Second, you develop a tracking mechanism to enforce the terms of the government contract. What might these incentives and structures look like? How about a monetary bonus for each year a prisoner is released early, paid five years later if that prisoner hasn’t been convicted of a crime? As the cost to the taxpayer is the prison’s revenue, and a bonus would go directly to the prison’s profit, there’s enormous room for a win-win transaction here. (E.g. if the prisoner costs $30K annually to house, and the prison’s profit is $6K, a $10K per year bonus reduces government expense by 2/3rds, while increasing prison profit). In fact, it’s even better than that for the taxpayer if the released prisoner is paying income tax. Why not tie the bonus to the income tax generated, providing the prison system an incentive to train prisoners in high-demand fields?

    Now prisons have a financial incentive to adopt programs that lead to lower recidivism and higher employment. Novel approaches to prisoner re-acclimation in places like New Zealand and Cuba have seen very promising results. A strong profit motive would bring this experimentation and innovation to the U.S.

    The above is simply an example. I’m sure there are many more and smarter changes to the incentive structures faced by private prisons that more closely align their interests with the governments and people they serve. 

    What Would Keep Me Up:

    Though many overestimate the difficulty of selling to government, dealing with a hot-button political issue is a whole ‘nother story. Convincing the first several jurisdictions to adopt a new structure for prison compensation may prove extremely difficult. Politicians may see too much political risk. Citizens may feel the changes undermine their safety. Prison companies may not bid, or bid quite highly, on the contracts offered by your early jurisdictions. The whole industry may see your team as naive hippies. This is not a challenge for the faint of heart or the easily discouraged, and the whole thing may ultimately prove futile. 

    Not to mention all of this, you’d be enormously dependent on the results from your first several customers, which would take years to validate, and not be anything close to entirely in your control.

    Passion Quotient: 

    This mission has the potential to help millions of prisoners reclaim their lives and freedom, save the taxpayer significant amounts of desperately-needed funds, and reduce future crime. Passion will not be a problem. 

    Paying The Bills: 

    Third-party procurement for government is an existing and relatively large market. The ongoing tracking provides additional monetization opportunities, as does the distribution and management of incentive payments.

    In Short:

    Prisons are broken to the core. Restructuring the incentives faced by private prisons seems to me the fastest and most plausible way to upend the dismal existing system.

    Vote!

    Check out Chris’s idea today, Retweet Your Team, and vote on whose is better!