Timothy Ferriss's Blog, page 118

Chad Mureta runs his seven-figure app business from his iPhone. (Photo: Jorge Quinteros).

I first met Chad Mureta in Napa Valley in 2011.

Two years prior, he had been in a horrible car accident. He’d lost control of his truck in at attempt to avoid a deer, hit a median, and flipped four times, nearly destroying his dominant arm in the wreckage.

While in the hospital for a lengthy recovery, a friend gave him an article about the app market. Shortly thereafter, Chad began designing and developing apps. His results?

“In just over two years, I’ve created and sold three app companies that have generated millions in revenue. Two months after launching my first company, one of my apps averaged $30,000 a month in profit. In December of 2010, the company’s monthly income had reached $120,000. In all, I’ve developed more than 40 apps and have had more than 35 million app downloads across the globe. Over 90 percent of my apps were successful and made money.”

After finishing rehab, Chad was able to leave his real estate company, where he’d been working 70 hours a week, to run his app business from his iPhone… in less than 5 hours per week.

“Apps” are the new, new thing, thanks to major successes like Draw Something (bought by Zynga for $210 million) and Instagram (bought by Facebook for $1 billion), among others. But for all the hype and promise, few people actually know how to create something that gets traction.

In this post, Chad will discuss his step-by-step formula for rapid app development and sales optimization. It covers real-world case studies and the details you usually don’t see: early prototype sketches, screenshots, how to code if you don’t know how to code, and much more.

Last but not least, don’t miss the competition at the end. If you’ve ever thought “I should make an app that…,” this one is for you…

Enter Chad Mureta

When you are on your deathbed, will you be able to say you lived a fulfilled life?

I nearly couldn’t.

I started my app business from a hospital bed, wondering if I even wanted to live. I had barely survived a terrible car accident that shattered my left arm. I had gone through two groundbreaking operations, and spent 18 months in painful rehabilitation.

With limited insurance, I had racked up $100,000 in medical bills. Even though I survived, I had no clue how to get out of the deep hole I felt trapped in. I was moved to a physical rehabilitation center and worked on reconstructing my body, my mind, and ultimately my life. While I was there, I read two books that made a huge impact: Unlimited Power strengthened my thought processes, and The 4-Hour Workweek inspired me to pursue lifestyle freedom.

During that time, a good friend gave me an article about “appreneurs” and told me I should consider getting into the business. I learned that most appreneurs were one- or two-person teams with low costs, and the successful ones were bringing in millions in profits. Still in my hospital bed, in a state of semi-coherence from the pain medication, I began drawing up ideas for apps.

Three weeks after my final surgery, desperate, broke, and grasping at straws, I borrowed $1,800 from my stepdad and jumped into the app business. Fortunately, taking that leap was the best decision I’ve ever made…

These days, my life is about doing what I love while earning easy income. I run my business from my iPhone, working in a virtual world while earning real dollars. I am part of a growing community of “appreneurs,” entrepreneurs who make money from applications that are used on iPhones, iPads, iPods, Droids, and Blackberries. As of this writing, the world’s youngest appreneur is nine years old, and the oldest is 80!

Appreneurs earn money while creating lifestyles of great freedom. Two of my appreneur friends spend several months of the year doing nonprofit work in Vietnam, while their businesses are generating seven-figure incomes. Another is taking his kids to see the Seven Wonders of the World, creating priceless memories with his family. Still another friend goes backpacking throughout Europe with his wife for most of the year. As for me, I’ve hiked in the Australian Outback, trekked with Aborigines across the desert, climbed in the Rocky Mountains, got certified in solo skydiving, heli-skied in Canada, walked on fire, and most important of all, learned not to take life so seriously.

No matter what your dream lifestyle is, you can have it as an appreneur.

The Opportunity for Appreneurs

There are currently more than 4.6 billion cell phones being used worldwide, enough for two-thirds of the people on Earth. The app market is literally the fastest growing industry in history, with no signs of slowing down. Now is the perfect time to jump into the mobile game.

What happened during the early days of the Internet, with the creation of websites like Google and eBay, is exactly what’s happening today with apps and mobile technology. The only difference is that we have experienced the rise of the Internet and are conditioned to react more quickly to the app revolution. This means that the app world is running light years ahead of the Internet, when it was at the same development stage. Developing apps is your chance to jump ahead of the masses and not be left behind, saying years from now, “I wish I had…”

Common Objections

“I’m not a tech person. I have no experience in this market.”

I was in the same spot, and I still don’t know how to write code. But I found successful people to learn from, emulated their models, and hired programmers and designers who could execute my ideas. If you can draw your idea on a piece of paper, you can successfully build an app.

“The app market has too much competition. I don’t stand a chance.”

This industry is just getting started– it’s less than four years old! What makes the app business unique is that the big players are on the same playing field as everyone else. They have the same questions and challenges as you and I will have.

“I don’t have the money.”

You don’t need a lot of money to start. It costs anywhere from $500 to $5,000 to develop simple apps. As soon as you launch your app (depending on your sales), you could see money hit your bank account within two months.

“It’s difficult… I don’t understand it… I’m not smart enough.”

Just like everything you’ve learned in life, you have to start somewhere. Fortunately, running an app business is far easier than almost every other type of business. Apple and Google handle all of the distribution, so you can spend your time creating apps and marketing them. And you don’t have to come up with new, innovative ideas. If you can improve on existing app ideas, you can make money.

Many people are joining the app gold rush with a get-rich-quick mentality and unrealistic expectations. Maintaining an optimistic perspective is important, but so is understanding that you will have to put in work. My goal in this post is to help you think like a business owner, and show you the map I’ve used to find “the gold.” This is not a one-time app lottery, and you can’t treat it as such. If you think of this endeavor as a long-term business, it will grow and become a sustainable source of income.

Still interested? Then let’s get started!

Step 1: Get a Feel for the Market

As with any business, your success will be directly related to your understanding of the marketplace. The App Store is the marketplace of the app business, so in order to understand the market, we have to study the App Store. This seems rather obvious, but you wouldn’t believe how many developers I meet that don’t understand this concept. They don’t watch the market, follow the most successful apps, or try to figure out why those apps are successful.

In order to become a great app supplier, you must first become an app addict. That means spending at least 2-4 weeks researching the market while downloading and playing with tons of apps (give yourself an app budget of $100 to start). This training period is an investment in your expertise, which will become the lifeblood of your success. The more hours you rack up playing around and studying successful apps, the better you’ll be able to understand their common traits and what users desire.

So, how do you keep pace with the market? The best way is to study Apple’s cheat sheet constantly. The App Store displays the top paid, top free, and top-grossing apps (the apps that make the most money, including free apps), almost in real-time. Apple provides the same lists in the individual app categories.

These charts are golden because they tell us volumes about the market. The best part is this information is freely accessible to anyone, at any moment (unlike the market info for basically every other industry).

Review these charts frequently, and keep a notebook of potential trends you spot. Doing this repeatedly will educate you on successful app design, marketing, and various pricing models. The research you’re doing is simple, costs nothing, and it’s actually fun!

Here are some questions to ask while you’re researching successful apps in the market:

Why is this app successful?
What is its rank and has it been consistent?
Why do people want this app? (Look at the reviews.)
Has this app made the customer a raving fan?
Does this app provoke an impulse buy?
Does this app meet any of my needs?
Did I become a raving fan after trying it?
Will the customer use it again?
How are they marketing to their customers? (Check out the screen shots, icon design, and descriptions.)
What is the competitive advantage of this app?
What does this app cost? Are there in-app purchases? Advertisements?

Most developers will build an app and expect tons of people to find and download it right away. That rarely happens. You have to figure out what people are interested in and the kinds of apps they’re downloading first, then you build your app based on that insight.

Once you’ve put in the necessary 2-4 weeks of research and feel you have a decent grasp on the market, it will be time to look back on the trends you discovered and explore some ideas for potential apps you can develop.

Step 2: Align Your Ideas with Successful Apps

How do you know if the market wants your app? Again, you’ll need to look at the Top Apps chart. Are apps like the one you want to create listed there? If yes, you’ve got a potential winner. If not, keep looking. It’s that simple.

Don’t hate; Emulate! When you follow in the footsteps of successful apps, you will have a better chance of succeeding because these apps have proven demand and an existing user base. This takes the guesswork out of creating great app ideas.

I can’t stress the importance of emulating existing apps enough. It’s easy for people to fall in love with their own idea, even if the market doesn’t show an appetite for it. But this is one of the costliest errors you can make.

Unfortunately, developers make this mistake all the time. They focus on generating original ideas and spend a lot of time and effort creating those apps. When it doesn’t work out, they go to the next untested idea, instead of learning from the market. Often times, they repeat this cycle until they run out of money and dismiss the app game. This doesn’t have to be your experience.

A personal example of how to successfully emulate competitors is my Emoji app. First, I took a close look at what the market offered and downloaded all the major emoticon apps. I liked what I saw, but noticed that there was a lack of variety and limited functionality.

Screenshots from a competing Emoji app. The app (left) is opened once to provide the user with instructions on how to enable the Emoji keyboard (right).

I wondered how I could improve upon these existing apps, given that the Emoji keyboard had a limited number of emoticons that couldn’t be increased. I was also curious how profitable these apps could be if they were only being used once.

I kept brainstorming until it hit me. I couldn’t add more emoticons to the Emoji keyboard, but I could include unlimited emoticons within my app that people could send as images via text message or email.

I created an app that not only enabled the Emoji keyboard, but also contained an additional 450 emoticons within the app itself, which could be shared via SMS, e-mail, Facebook, and so on. The app was used constantly since users had to return to the app to send an emoticon.

Screenshots of my Emoji app.

The Emoji app was developed in two weeks. It followed the freemium model, meaning free with an in-app purchase option. The app hit the number one spot in the App Store’s productivity category and the number 12 spot in the top free overall category within six days, raking in nearly $500 per day. Bingo.

Whenever you decide to look into emulating an app, ask yourself these six questions:

Why are people purchasing this?
Can I do something to emulate this idea and take it to another level?
What other ideas would this app’s demographic like?
How many other similar apps are in the market? (Visit TopAppCharts.com to find out.)
How successful and consistent have they been?
How does their marketing and pricing model work?

Step 3: Design Your App’s Experience

You’ve studied the market, you see an opportunity, and you have an idea that could be profitable. Great! Now it’s time to turn those thoughts into something tangible.

To convey your idea properly, you can simply draw it on a piece of paper. Maybe it will look like a 3-year old’s artwork, but it will still convey what you’re trying to do. Some people like putting this together in digital form, using Photoshop or Draft. Whatever you’re most comfortable with, and whatever will give the programmers the details they need, is the way to go.

For your viewing pleasure, here are the rudimentary drawings (a.k.a. wireframes) for my first app, Finger Print Security Pro. As you can see, it doesn’t have to be pretty!

And here’s how the app’s final design turned out:

To make the design process easier, I look at certain apps in the App Store and reference them to show my programmers what I’m looking for. For example, I’ll say, “Download the XYZ app. I want the ABC functionality to work like theirs. Take a look at the screenshots from this other app, and change this.” I take certain components of apps that I’d like to emulate, and give them to the programmer so that we are as clear as possible.

Notice any similarities? Highlight’s menu (left) emulated the style of Facebook’s menu (right).

The clearer you are, the fewer misunderstandings and problems you will have once it’s time to hand off your drawings to a programmer. The idea is to convey what the app will look like, where everything will be placed, and what happens if certain buttons are selected. This helps the programmer know what you want and will be a useful blueprint when designing your app. Do not be vague or ambiguous. You should know what every part of your app will do. If you don’t, you need to develop your idea more thoroughly.

You have to consider your design to be final before you can begin the coding phase. Inevitably, you will have ideas for additional features once you start testing the initial versions of your app. But if you decide to make major changes after a substantial amount of work has been done, it can frustrate your programmer. It’s like telling the builder who just installed your fireplace that you want it on the other side of the living room. The news will not go over well. Most people don’t realize this is what they are demanding of their programmer when they ask for big changes. That’s why it’s important for you to take your time and carefully plan every aspect of the app before you submit it for coding.

Step 4: Register as a Developer

You now have your idea drawn out. Before you go any further, you need to sign up as a developer with the platform for which you’re looking to create apps.

Don’t be intimidated by the word “developer.” It doesn’t mean you have to be the programmer. It’s simply the name used for somebody who publishes apps. All you have to do is set up a “developer account” so you can offer your apps for sale in one of the app stores.

Here are the links for each platform and a brief overview of their requirements.

Apple iOS *— Registration requirements include a fee of $99 per year and accepting the terms of service.

Android— Registration requirements include a fee of $25 per year and accepting the terms of service.

BlackBerry— Registration requirements include a $200 fee for every 10 apps you publish. You must have a BlackBerry World App Vendor Agreement in place with RIM (the creator of BlackBerry) to distribute apps.

* For your first app, I strongly suggest developing for Apple iOS, rather than Android or Blackberry. Simply put, Apple users are much more likely to spend money on apps. You will increase your odds of making a profit simply by developing for the iOS platform.

Also, don’t forget to go over the App Store review guidelines. Apple enforces these rules during the review process, and if you don’t follow them, your app will be rejected. For instance, you might remember seeing a plethora of fart or flashlight apps on the App Store awhile back. As a result, Apple has decided to no longer accept those types of apps. Knowing these rules can save you a lot of time and effort. If you see any of your ideas conflicting with the guidelines, reject them and move on to the next one.

Step 5: Find Prospective Programmers

Coding your own app, especially if you’re teaching yourself at the same time, will take too long. The likelihood of you getting stuck and giving up is very high. It will also be unsustainable over the long run when you want to create several apps at the same time and consistently update your existing apps. After all, the goal is to get your time back and escape the long hours of the rat race. Therefore, programmers will be the foundation of your business. They will allow you to create apps quickly and scale your efforts.

Hiring your first programmer will be a lengthy process. You’ll need to: post the job, filter applicants, interview qualified candidates, have them sign your NDA, explain your idea, then give them a micro-test… all before coding begins! But while this process takes time, it is time well spent. Making great hires will help you avoid unnecessary delays, costs, and frustration in the future. You’ll always be looking to add new talent to your team, so learning how to quickly and effectively assess programmers is an important skill to develop.

Let’s get started. The first part of this step is to post your job to a hiring site.

Top Hiring Resources

These websites allow programmers to bid on jobs that you post. As you can imagine, the competition creates a bidding frenzy that gives you a good chance of getting quality work at a low price.

Here are a few of my favorite outsourcing sites:

oDesk— Its work diary feature tracks the hours your programmer is working for you and takes screenshots of the programmer’s desktop at certain time intervals.

Freelancer— This site has the most programmers listed. They claim that twice as many programmers will respond to your ad, and I found this to be mostly true.

Guru and Elance. Both of these sites have huge lists of programmers.

 

Below is a template of a job posting, followed by an explanation for each of its components:

Click the image to enlarge.

Enter the skill requirements—What programming languages do they know? For iPhone apps, the skills I list are: iPhone, Objective C, Cocoa, and C Programming.

Give a basic description of your project—Keep it simple and skill-specific. Tell the applicants that you will discuss details during the selection process. Do NOT reveal the specifics of your idea or marketing plan. Use general descriptions, and request info on how many revisions (a.k.a. iterations) their quote includes.

Post your ad only for a few days—This way programmers have a sense of urgency to quickly bid on your job.

Filter applicants—I always filter applicants using these criteria:

- They have a rating of four or five stars.

- They have at least 100 hours of work logged.

- Their English is good.

Compose individual messages to all suitable applicants, inviting them to a Skype call for further screening. Most of these programmers will overseas, which can present issues with communication and time zone differences. Therefore, a Skype interview is an absolute must before you can continue. Disqualify anyone who is not willing to jump on a Skype call.

The Interview: Essential Questions to Ask Programmers

Don’t give away any of your ideas during this initial conversation. Whenever the topic comes up, say you’ll be more than happy to discuss everything after they sign the NDA (if you want a copy of the NDA template I use, see the bottom of this post). Here are the questions you should ask each applicant before committing to anything:

- How long have you been developing apps?

- How many apps have you worked on? Can I see them?

- Do you have a website? What is it?

- Do you have references I can talk to?

- What’s your schedule like? How soon can you start?

- What time zone do you work in? What are your hours?

- What’s frustrating for you when working with clients?

- Are you working with a team? What are their skills?

- Can you create graphics, or do you have somebody who can?

- Can I see examples of the graphics work?

- What happens if you become sick during a project?

- What if you hit a technical hurdle during the project? Do you have other team members or a network of programmers who can help you?

- How do you ensure that you don’t compete with your clients?

- Can you provide flat-fee quotes?

- What’s your payment schedule? How do you prefer payment?

- Can you create milestones tied to payments?

- Do you publish your own apps on the App Store?

- How do you submit an app to the App Store? (Can they verbally walk you through the process, or do they make you feel brain challenged?)

Finally, mention that you like to start things off with a few simple tests (creating/delivering your app’s icon and a “Hello, World!” app) before coding begins. You need to tell them this upfront so they aren’t surprised after they have provided their quote. Most programmers are happy to get these tests done without a charge, but some will want a small fee. In either case, be clear with this requirement and have them include it in the quote.

During the interview, pay attention to how well they are able to explain themselves. Are they articulate? Do they use too much techno babble? Do they speak your native language fluently? Do they seem confident with their answers? How is their tone and demeanor? If you have any issues or worries, you may want to move on to somebody else. But if you can communicate with them easily and your gut is telling you “Yes,” you’ll want to proceed to the next step.

In either case, thank them for their time and mention that you will follow up with an NDA agreement if you decide to move forward.

Step 6: Sign NDA, Share your Idea, and Hire Your Programmer

You must protect your ideas, source code, and any other intellectual property. These are the assets that will build your business, so you need to have each potential programmer sign an NDA before you hire them. Yes, it’s rare to have an idea stolen, but it does happen (read the bottom of this post if you want a copy of the NDA that I use).

As you’re going through this process, you will be getting feedback on your programmers’ responsiveness. For instance, if it’s taking too long for them to sign the NDA, it might indicate how slowly the development process will move. Buyer beware!

Once the NDA has been signed by both parties, you can share your idea and designs with your programmer. At this stage, it’s critical to ensure they have the skills to complete your app. You do not have any wiggle room here, especially on your first app. Either they know how to make it or they don’t. You want to hear things like, “I know exactly how to do that” or “I’ve done similar apps, so it will not be a problem.” You don’t want to hear things like, “I should be able to do that, but I have to research a few things” or “I’m not sure but I can probably figure it out.” If you hear those words, switch to an app idea they are confident about or run for the hills.

After you’ve found the best programmer for the job, you can commit to hiring them. Establish milestones and timelines during the quoting process (break up the app into several parts), and decide on a schedule for check-ins that you’re both comfortable with (ask them directly how they like to be managed). You will need to periodically review their work, from start to finish. Most applications go through multiple iterations during design and development, and I won’t release partial payments until I’m fully satisfied with each milestone.

Step 7: Begin Coding

Rather than jumping haphazardly into a full-fledged project, I prefer to gradually ramp up my programmer’s workload by starting with a couple smaller tasks. You need to assess their graphics capabilities, implementation speed, and overall work dynamic (e.g. communication, time zone, etc.). If you’re underwhelmed with their skills, you need to get out quickly. Remember: Hire slow, fire fast. It will pay off over the long run.

Here’s my three-step process during the coding phase:

1. Icon—Ask the programmer to create and deliver the icon of your app. You will probably have several ideas for icons, so pass them on and ask for a finished 512 x 512 iTunes Artwork version of the icon.

2. Hello, World!—Ask the programmer for a “Hello, World!” app. It’s a simple app that opens up and shows a page that displays “Hello, World!”, and it will take them 10 minutes to create. The idea here is not to test their programming skills, but to determine how they will deliver apps to you for testing. This app should include the icon they created, so you can see how it will look on your phone.

3. App Delivery—When the programmers are ready to show you a test version of your app, they have to create something called an “ad hoc” (a version of your app that can be delivered to and run on your iPhone, without the use of the App Store). This ad hoc version of your app needs to be installed on your phone before you can test it. The initial installation was a bit cumbersome in the past, but a new service called TestFlight has simplified the process. I ask all programmers to use this service even if they have not used it before. They will be able to figure it out, and you’ll be able to install your test apps with a few touches on your phone.

The first version of your app is finished and delivered, and you’re now staring at it on your phone/tablet. Give yourself a pat on the back — you’ve made serious progress! But don’t get too caught up with yourself, because now it’s time to begin the testing phase.

Step 8: Test Your App

If you were having a house built, you’d want to make sure everything was in working order before you signed off. You would check major things like the roof and plumbing, all the way down to minor things, like crown molding and paint. You need to do the same thing with your app.

To start, your app must perform as expected. Pull out your initial design document and go through every feature. Never assume that something works because it worked last time you tested the app. Test each feature every time, especially before the final release.

Most importantly, don’t be the only tester. Your app makes sense to you, but it might not to others. You need to get everyone you know, from your 12-year-old nephew to your 75-year-old grandmother, to test your app.

The time you spend on testing is crucial because you will see how consumers use your product, what features are intuitive, what they don’t understand, and their patterns. They will have questions that won’t occur to you because you designed the app and everything about it is obvious to you.

Hand the app to them and say, “Hey check this out.” Don’t mention that it’s your app, what it’s supposed to do, or how it works. Give as little information as possible and watch as they try to understand and navigate through your app. This experience will be similar to the one your real user will have, because you won’t be there to explain things to them either.

Watch them testing your app and ask yourself these questions:

- Are they confused?

- Are they stuck?

- Are they complaining?

- Are they using the app the way you intended?

- Did they find a mistake or a bug?

- Are they having fun?

- Are they making suggestions for improvements? If yes, which ones?

Get them to talk about their experience with your app. They will be more honest if they don’t know the app is yours. Don’t get offended if you hear something you don’t like; their feedback is priceless. Assess each response to see if there’s a problem with your app, then ask yourself these questions:

- Would other users have the same issues? If yes, how can I fix them?

- Should I move things around?

- Should I change colors to improve visibility?

- Would adding some instructions help?

- Should I improve navigation?

Testing and debugging will take several iterations, like the design and development stages. This is all part of the process. Don’t forget to use TestFlight to save lots of time with the mechanics of installing test versions of your app.

Just remember: If you keep tweaking things and adding features, you might unnecessarily increase costs and production time. You need to get the app on the market quickly and in a basic form to test the concept. Only redesign during this phase if you feel you have a good justification for it. Otherwise, add the idea to your update list and move forward with development (I keep an update list for each app and refer back to it when the time is right).

Step 9: Post your App to the Market

At this point, you’ve had all of your friends and family test your app, taken the best feedback into account, and wrapped up any final changes with your programmer. Congratulations – it’s time for you to send the app to the App Store for review!

It’s a good idea to have your programmers show you how to submit your first few apps. Do not give out your developer account login information to your programmer or anybody else. The best way to have them show you how to submit your app, without having to giveaway your login, is to do a screen-share over Skype or GoToMeeting and have them walk you through the process. As your business grows, you might want to delegate this task to someone on your team.

Below is a screencast on how to upload an app to the App Store. As you’ll see, it’s a fairly confusing and tedious process. Best to leave this task to your programmers:

The amount of time Apple will take to review and approve/reject your app will depend on whether you’re submitting on behalf of yourself or a company. If you’re an individual, it will usually take 3-7 days. If you’re a company, it will likely take 7-10 days.

The real fun begins once your app is approved and available for download…

Step 10: Marketing Your App

The App Store is filled with thousands of great apps, but most developers are not skilled when it comes to marketing. Meanwhile, many poorly designed apps rank highly because their developers have figured out the marketing game. How do they do it?

You really need to focus on a few key areas to effectively market your apps, which will allow customers to discover and download them. Understanding how an app’s basic elements are marketing opportunities is essential to being successful in the app business. Your job is to create a seamless flow from the icon all the way to the download button. Let’s take a closer look at these components, which you can adjust at any time from your developer account:

ICON

The first thing users will see when they are checking out your app is the icon — the small square image with the rounded corners to the left of the app title. It’s also the image that users will see on their phone after they install your app.

The icon is important because it’s how the users will identify your app. It needs to look sharp, capture the app’s essence, attract the users’ attention, and compel them to investigate your app further.

Great app icons are clear, beautiful, and memorable.

Many developers create icons as an afterthought and focus all of their effort on the app itself, but the icon is the first impression you will make on the users. The old expression “You don’t get a second chance to make a first impression” applies here. Make sure you have a quality icon that represents your app and makes the users believe it has value.

APP TITLE

Over 80 percent of searches in the App Store are related to an app’s functionality, rather than an app’s name. Therefore, it is critical that you help users find your app when they perform relevant keyword searches in the app store.

Source: Chomp.com

Each word in your app’s title serves as a keyword, much like keywords in search engines. You can think of the title as your URL. For instance, if you type “angry” into the App Store search field, the Angry Birds apps will return as a search result.

DESCRIPTIONS

Having a compelling description for your app is like having a great opening line — people are more willing to learn about you once you’ve piqued their interest. The first chunk of your app’s description needs to be packed with the most relevant information customers should know.

If applicable, use statements like “Top App 2012” or “One of the Most Addictive Games in the App Store.” Follow it up with a call-to-action, such as, “Check out the screenshots and see for yourself.”

SCREENSHOTS

Screenshots are great marketing tools because they give users a visual of what they will experience. Think of them as the trailer for your app. Here are a couple examples of effective screenshots:

Nike+ GPS screenshots.

Free Music Download Pro screenshots. Note the use of captions to explain the app’s features.

Many people shopping for apps won’t read the description, but will instead scroll down to the screenshots. The screenshots need to convey the main functionality of the app without showing too many details that may confuse users. If your screenshots are cluttered, it will be as ineffective as a realtor trying to sell a house with messy rooms. The brain gets overwhelmed and buyers have more trouble seeing the product’s true value. Therefore, the screenshots you include should be clean, appealing, and informative.

KEYWORDS

Unlike your icon and title, keywords are not something the users get to see. When you submit your app to the App Store, you’re allowed to provide keywords relevant to your app. When users search for one of the terms you entered, your app appears in the search results.

For example, if you type in the word “kids” or “game” on the App Store, you will find that Angry Birds is one of the search results. The terms “kids” and “game” are not in the app title. The makers of Angry Birds most likely chose those keywords to associate with their app.

A good example of effective keyword usage is an app I created called Flashlight. Since the name is Flashlight, we came up with keywords, such as “bright,” “help,” “light,” and “camping.”

One time, I added the term “phone” to the keywords of my free prank fingerprint app. This seemingly minor change propelled the app to the number one top overall free category, which moved the company’s income from $1,000 per day to $3,000 per day. This is the power of refining the marketing components for your app. Simple changes can dramatically increase your revenue.

CATEGORIES

The App Store organizes apps into specific categories to help users find them more easily. In addition to the top overall rankings of all apps, each category has its own top rankings and, therefore, generates a certain amount of visibility based on these charts. Users looking for certain apps often browse through these category charts without looking at the top overall charts. For instance, an app that doesn’t show up in the top 200 overall might still be in the top 10 of a particular category.

When you’re submitting your app for review, make sure to select the most relevant category for your app. On the other hand, many apps can be classified into more than one category. You have to choose one, but you can always change the category during an update.

One of my apps, Alarm Security, wasn’t performing well, and I was trying to bring it back up in the rankings. I initially tried changing the name and keywords, but it didn’t move much. The one thing I hadn’t tried was switching it out of the Entertainment category. The app contained various alarm sounds (like loud screams and gunshots), so I assumed users would use it more as a goof than as a tool. I was wrong.

Once I moved the app into the Utilities category, the number of downloads skyrocketed. After five days, the paid downloads had tripled, and it was only because of a category change.

Just as your app will always need certain refinements due to consumer demand and competition, so will your marketing. For most of my apps, I have changed the icon and screenshots three to five times and the title and description between 5 and 10 times. I change keywords almost every time I update apps. I always switch the categories when it makes sense. Keep an open mind and continue to be inspired by your observations during your market research.

Finally, there’s a simple rule of thumb I follow for making changes: Tweak once per week, then measure. You have to allow ample time to see the effect of any changes you make. Measure your results, then make adjustments based on your data in the following week. Your goal is to increase traffic and revenue, all while improving your users’ experience with the app.

Bonus Marketing Tactics

FREE APPS

After you’ve taken care of the basics, your best marketing tool will be offering a free version of your app. It will generate traffic and visibility that you otherwise wouldn’t get.

Free apps create the most traffic because they have the smallest barrier to entry. It takes five seconds to download, and it’s free. Why wouldn’t you push the button? Once the free version of your app gains some traction, you can use it to advertise the paid version of the same app. This is like getting those free food samples at the supermarket. If you like the sample you tasted, you might buy the whole bag and become a long-term customer.

NAG SCREENS

Nag screens (pop-ups that remind users to check out the paid version of the app) have been the most critical marketing tactic for my business. You might worry about annoying users with these ads, and that is a valid concern, but you need to think of nag screens as adding value for your users. If they downloaded your free app and they are using it, a percentage of your users will be interested in buying the paid version of your app. For those who don’t, a quick pop-up message is a small price to pay for using the free version.

You have to accept this and not shy away from this type of marketing. If you’re still on the fence, consider this: When Apple launched its iBooks app, it used a nag screen within the App Store app. If you had an iPhone at the time, you may remember seeing that pop-up inviting you to download iBooks. Well, you were nagged by the one and only Apple.

Basic nag screen (left) vs. Advanced nag screen (right). Advanced nag screens typically have three times higher click-thru rates.

When adding a nag screen, explain to your developer what you are looking for, and reference specific examples of other apps that have nag screens. Be sure you can change the nag screen without submitting a new update to the app store. To do this, tell the developer you want your nag screen to be dynamic. This will allow you to change your marketing message redirect your app’s traffic within seconds. This is an absolute must. Your nag screens will lose a huge part of their effectiveness if you cannot change them on the fly.

How do you assess the effectiveness of your nag screen? All you have to do is keep track of how many times you show a particular nag screen and how many users click “Yes” to check out the app(s) you’re promoting. This is called your click-through rate, and the higher the percentage, the better.

Final Thoughts

This is the first time in history when so many of us have the tools and access to knowledge that can quickly lift us out of the rat race. Your background, gender, race, education, and situation are irrelevant. All you need is the desire and a game plan.

You don’t have to wait till “someday” to fulfill your dreams. You can start right now…

Contest and Bonuses

We’re throwing a contest for any readers who are ready to dive into the app world. Whoever comes up with the best idea for an iPhone app (as decided by me and my team) will have 100% of their development costs covered. That’s right: You won’t need to spend anything to have your app made – all it will cost is your time and effort. This will be a great learning experience for the winner, so if money is all that’s holding you back, we want to help you get started.

Here are the details:

- You have 1-week (ending Monday, April 30, 2012 at 9am EST) to research and design your app idea. Your app should try to fill a void in the market or improve upon apps that are currently available.

- Once you’ve decided upon your idea, post a comment below with a detailed explanation of the app you want to develop. Bonus points if you can show us (with a drawing, video, etc.) how your app will function. More bonus points if you show us the research you did to prove your app’s potential for success.

- You can only submit one (1) idea (one entry per person), so make it good!

- Up to $5,000 USD of your development costs will be covered. 100% of all revenues earned will go to the winner.

- Winner gets a 1-hour phone call with me (Chad) at any point during development or marketing.

For those who are worried that someone is going to steal your idea and make a million dollars with it– you don’t have to enter the contest! Just remember: my success in the app store came from emulating successful apps. In other words, borrowing proven ideas and trying to make them better. If someone else can succeed by taking one of my ideas and improving upon it, that’s only fair game. Don’t let the fear of losing prevent you from trying to win.

Finally, for those who’d like a copy of my NDA template (along with the checklist I use when hiring a new coder), email a copy of your receipt for App Empire, my comprehensive book on app development and marketing, to bonus (at) appempire.com. The book goes into depth on advanced marketing and monetization techniques, including how to put your business on cruise control (automate).

We look forward to seeing what you guys come up with! Talk to you in the comments :)

Many times in the last five years, I’ve been asked: “If you could have dinner with anyone in history, who would it be?”

My answer is always the same: Richard Feynman.

Right alongside Seneca’s Letters from a Stoic, Feynman’s book Surely You’re Joking, Mr. Feynman! (Adventures of a Curious Character) hugely impacted every aspect of my thinking when I first read them circa 2005. Since then, I have studied Feynman’s letters, teaching style, discoveries, and beyond. How many Nobel Prize winners also safe crack and play bongos in bars for fun?

The above video will give you an taste of why I love Richard Feynman. It was forwarded to me by Brew Johnson and J.R. Johnson, whom I owe huge thanks, as I’d somehow missed it. About the program, Professor Sir Harry Kroto, recipient of the Nobel Prize for Chemistry, said:

“The 1981 Feynman Horizon is the best science program I have ever seen. This is not just my opinion – it is also the opinion of many of the best scientists that I know who have seen the program… It should be mandatory viewing for all students, whether they be science or arts students.”

Feynman’s makes me want to be a better teacher and, ultimately, a world-class parent (you’ll see what I mean). A few notes on the video:

- I first watched this in 10-minute bites before bed. There’s no need to watch it all at once.

- :30-:38 is fascinating physics, but physics nonetheless. He does a masterful job of getting lay people excited (his cadence helps a lot), but skip if needed, rather than missing what follows.

- :40+ explains part of his teaching philosophy, which greatly influenced how I outline my books.

- His concept of “active irresponsibility” is worth remembering.

May you all experience the pleasure of finding things out, starting here with a closer look at a most curious character: Richard Feynman.

If you could have dinner anyone from any time in history, who would you choose and why? Assume you can’t tell anyone about the dinner, so bragging rights don’t apply. What would you want to learn, know, or experience?

###

Odds and Ends:

Tim Ferriss on Reddit AMA (answering some controversial questions, too)

The 4-Hour Chef site – Brand-new and soon getting more. Some of the copy is placeholder text, but it give you an idea.

Let us start with a quote, often misattributed to Goethe:

"Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one's favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now."

- William Hutchinson Murray, The Scottish Himalayan Expedition (1951)

If you want a lesson in boldness, and to cross things off of your bucket list, there is no better teacher than Ben Nemtin.

His story, and that of the entire Buried Life team, is amazing.

It started with a list of 100 things and a planned two-week roadtrip. Along the way, Ben has somehow managed to play basketball with Obama, throw the first pitch at a Major League Baseball game, delivery a baby (not his), make the biggest roulette spin in Vegas' history, and much more.

Most recently, they crossed off #19: Write a bestselling book. Their debut, What Do You Want To Do Before You Die?, just hit #1 on The New York Times, which will be announced officially April 15th. To celebrate? They're sending a copy of the book into space.

It all seems unbelievable, which is exactly why I love this guest post from Ben.

This original content covers his 6 steps for crossing anything off of your personal bucket list. There is a method. Everyone needs a kick in the ass sometimes, and this did it for me.

Enter Ben

If there's one thing I'm proud of, it's being able to tell good stories.

Not because I'm a particularly good storyteller, but because I've been able to accumulate some amazing experiences in the last 5 and a half years.

It was 2006 when I first hit the road with my next-door neighbor, his younger brother, and a kid I knew from high school to accomplish a list we had created of 100 things to do before we died. We made a promise that for every item we crossed off, we'd help a total stranger do something they wanted to do before they died. To date, we've accomplished 81 items on our list and helped over 81 people.

In addition to those Tim mentioned in the intro, and among others, I've made a TV show, crashed the Playboy Mansion, streaked a stadium, been on Oprah, reunited a father and son after 17 years, made a $300,000 donation to charity, helped a girl find her mother's grave for the first time, and am trying to help a college freshman find a new kidney (Need your help on this one: info here)…

Remember: 5 and a half years ago, I couldn't tell any of these stories.

Our mission was supposed to be a two-week road trip. The four of us never expected it to be much more, and we certainly didn't expect to be living it five years later. In the beginning, we didn't tell our friends what we were doing because we didn't know how to explain it. What we shared was really just a feeling: we were fed up and wanted something different. We decided to move forward without a real plan. A mechanic told us that the RV we'd borrowed wasn't going to make it home; I had fabricated a wedding to get time off of work; and we pretended we owned a production company to raise money for a camera and gas for the RV. The only thing we knew for sure was that we would be taking two weeks off before going back to college. The plan: to try and accomplish as many items on our list as possible and help some people. We didn't have a name for the project until Jonnie was assigned a poem in English 102 called "The Buried Life." It was written 150 years ago but spoke to the same feeling we were having at the time: the desire to unbury our lives and do the things that were important to us, not what was expected of us. There were four lines that stood out from the rest:

But often, in the world's most crowded streets,

But often, in the din of strife,

There rises an unspeakable desire

After the knowledge of our buried life;

When I think back to this time now, I remember sitting on the curb beside our RV the night before we were supposed to leave. We were arguing about whether or not to cancel the trip, because if the camper broke down, we didn't have enough money to tow it home. Five years later, I guess it's safe to say we've gotten pretty good at accomplishing our dreams. I'd like to say that there's something unique about us that makes us able to do these things, but the truth is the opposite. There is a formula and it's simple.

The more items we cross off our list, the more we become convinced that anyone can do anything. The formula comes down to these six steps:

#1. Stop and think about it. Really think about it.

What is it that you really want to do with your life? Start a business? Reconnect with an old friend? Dive to the bottom of the ocean? Smoke a cigar with Castro? Forget what you think you should do, what excites you? What feels impossible? Be honest with yourself. Your answers don't need to make an impression on anyone but you.

For many people, the four members of The Buried Life included, the impetus to make a life change only comes with crisis. The summer before we started The Buried Life, I was struggling with depression; Dave was struggling with his weight; Duncan had recently lost a close friend; and Jonnie was just plain angry and disillusioned with our generation ("No one protests anymore," he used to say). The four of us were so beaten down that we had no choice but to reevaluate what was important to us. Our project grew out of that frustration. Sometimes it takes a debilitating low or a crushing loss to snap you back to reality, but don't wait for it. Ferris Bueller put it well: "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it."

#2. Write it down.

Simply put, it's not real until you write it down. And by that I mean, take your dream and turn it into a project. Dreams have a funny way of staying dreams. But a project is something that needs to be done. Approach it as you would any other item on your daily or weekly to-do list. When you have a deadline— a presentation, a grocery list, a birthday gift you need to buy for someone–you find a way to get it done. Treat your dreams the same way. Add it to your list. You need to buy toilet paper. You need to spend the weekend in Paris with someone you love. When you write it down, you've taken the first step.

When we first started the project, we put things on the list almost as a joke. We didn't think about whether they could actually happen; we just pretended that anything was possible. "#53: Make a TV Show" was a dream we'd shared since we were young. We had no filmmaking background and no connections in the business. And we lived on an island in Canada. We decided MTV in the States would be the place to have a show because it was the biggest and best platform we knew of for reaching people like us. So we wrote it down. And then we started filming it, because that was just the next logical step. Every step led to the next. Four years later, we were executive producers and creators of our own show on MTV.

#3. Talk about it.

Everyone knows someone who knows someone who knows someone.

After you've come up with your list and written it down, start talking. Tell everyone you know. Tell your parents' friends. Tell new people you meet. Talk to your cabdriver. Talk to your boss. You never know whose uncle's wife may be able to help you. And don't just talk about it, but talk about it passionately. Enthusiasm is infectious, and people want to help when given the chance. Help can show up in the most unusual places, oftentimes the least expected ones.

We didn't come from money. We had an idea, we talked about it, and people showed up in incredible ways help us. Our first lawyer was our parent's friend who had heard about what we were doing and offered to lend a hand; our first manager was my godmother; I met my first Hollywood contact while traveling in Mexico; we cold-called local companies in our hometown to raise money for our first tour. Help often came in strange places. In 2007 we were able to finagle a five-minute meeting with Jann Wenner, legendary founder of Rolling Stone magazine, in order to discuss what it would take to cross #15 off our list, "Get on the Cover of Rolling Stone." The five-minute meeting turned into a 45-minute meeting (after Jann threatened to kick us out and asked his assistant for a knife), during which time we talked about everything from protests to Bob Dylan to the difference between our two generations. We told him about some of our most ambitious dreams, including "#19: Write a Bestselling Book." Jann was later instrumental in helping us get our book published—introducing us to a company where we met the smartest, most talented, best-looking book editor alive (hi Lia), who eventually offered us a deal.

#4. Be persistent.

Most people give up just before they reach their goal. We all hear "No," a lot, but we've come to realize that "No" usually just means "Not now." Be creative in your persistence. Don't piss people off by nagging them—think of innovative and clever ways to grab their attention. Be different, and never say die.

Last year, we broke into the Playboy Mansion. We rented a giant stripper cake and decorated it like it was for the Willy Wonka–themed party. Two of us dressed up like Oompa-Loompas and hid in the bottom of the cake, which was then delivered to the back door of the Playboy Mansion in a rented delivery truck. Security saw our homemade Playboy logo on the cake and allowed it to pass through the gates. After waiting inside the cake for six long hours (peeing in bottles and filming in night-vision), we hatched out unnoticed and partied at the Mansion all night with free rein. Security assumed we were just very rowdy employees.

Playboy had no idea we had been in and out, or that we had filmed our first episode. But when we went back a month later to ask for permission to air, they said, "If you air the episode, we'll sue you and have you charged with breaking and entering." We got ahold of the company's vice president, and he echoed that sentiment. MTV told us to move on and film another episode. Our production company said there was nothing we could do. In a last ditch effort we decided to send Hugh Hefner a handwritten letter along with the rough cut of the episode. A week later, we received this response from Mr. Hefner himself: "You can air the episode. Just know I'm not very pleased with you boys." I always thought that crashing the Playboy Mansion was my dream, but getting scolded by Hugh Hefner was way better.

#5. Be ballsy.

The majority of people don't go after their wildest dreams because they think they're unrealistic. Tim says it well: "Ninety-nine percent of people believe they can't do great things, so they aim for mediocrity." The level of competition is highest for realistic goals because most people don't set high enough goals for themselves. But not only do you statistically have a better chance of achieving what may seem like an unrealistic goal, doing so fuels you. Once you feel the first high of accomplishing something major and seemingly unattainable, you want to go bigger and badder, and you force yourself to fulfill the need all the more. Even better, the technically smaller goals suddenly seem less daunting.

We put "#95: Play Ball with the President" on the list because it was literally the most unattainable goal we could think of. I remember Jonnie called me from his dorm room in Montreal in 2008 right after Barack Obama had been elected and Jonnie said, "We should add 'Play Ball with Obama' to the list." I chuckled because it was so absurd and agreed. I found it humorous not only because the idea was so outrageous but also because I knew Jonnie was calling me from his "room," a tiny space he was renting for $200 a month, which he shared with a washer and dryer. Of all people, we weren't the best candidates for a pick up game with the leader of the Free World. Nonetheless, two years later we found ourselves shooting hoops with the President in the backyard of the White House. It's a long, complicated story, and I don't want to bore you with the details, but this is the kind of thing that the four of us chuckle about sometimes. It's as if we have horseshoes up our butts, but it's also happened too many times to be luck. When you dream big, you surprise yourself.

[TIM: I prodded Ben for the details about Obama, and it's anything but boring. Here's how it happened. First off, Obama only plays when Reggie Love is on the court. Reggie Love is the President's "body man" or, more formally, "special assistant and personal aide," and this b-ball detail made Reggie the man to look for. The gents called everyone they could think of (senators, legislators, etc.) who could e-mail or otherwise contact Reggie. He ultimately liked the idea, but, when passed up the flagpole, it was vetoed by the White House press team. The Buried Life had to end the "Obama" episode on a disappointing "To Be Continued..." Then, the crazy part: The President is up late one night, flips on the TV and randomly sees the end of the episode. Soon thereafter, someone approached Reggie at the White House: "POTUS is pissed." When Reggie asks POTUS what's wrong, he replies: "Why haven't I played basketball with The Buried Life guys?" Reggie explains that he ran it through the press team and they refused, to which Obama replies, "Let's make it happen." The next time the boys are in DC, Reggie invites them to check out the White House courts. While casually shooting around, the President strolls up and surprises all of them. After 20 minutes of hoops together, they ask the President, "What do you want to do before you die?" The answer? "Be an anchor on SportsCenter for a day."]

#6. Help others.

We've crossed off more than 80 list items over the last six years, but the moments that stand out the most are the ones when we've been able to step into someone's life and share something real with them. I've been surprised by how little it takes to impact someone's life. Something as simple as asking the question, "What do you want to do before you die?" and taking the time to listen is often all it takes. If you're feeling lost or depressed, you might find what you're looking for in someone else. Into the Wild said it best: "Happiness is only real when it's shared."

The first person we ever helped was a guy named Brent. He wrote to us in broken English saying his biggest dream was to bring pizzas down to the nearby homeless shelter. Brent had himself spent three years living in that shelter and remembered fondly the days people brought in food because those were the times it felt like someone gave a damn. When we talked with Brent in person, we learned that what he really needed was a truck. He had pulled himself out of the shelter by starting a business that relied on his truck, but it had just broken down. We knew we needed to help him find a new vehicle, but we didn't have the money ourselves. This is the very first video we ever made, trying to track down a truck for Brent.

#7. Your Turn.

Your dreams are closer than they appear. There's nothing about us four guys that makes us more able than anyone else to accomplish our goals, other than the simple fact that we've decided to go after them. George Elliot said, "It's never too late to be what you might have been." Don't wait. Why not start now? Post one thing you want to do before you die in the comments below.

The Buried Life is a community of 1,286,399 people answering the question: "What do you want to do before you die?"

How will you answer it? Let us know in the comments.

(Photo: watz)

If you're a white-collar worker, hacking your body isn't limited to the gym. In fact, what you do outside of the gym might be more important that what you do inside the gym.

Recent research suggests that those who sit from 9-5 (more than 6 hours daily) and exercise regularly are more likely to have heart disease than those who sit less than 3 hours per day and don't "exercise" at all. ff Venture Capital, a New York early-stage technology venture capital fund, recently moved into a new NYC location, and they've documented their experiments and findings in rethinking the office for physical optimization.

David Teten of ff VC contributed this detailed post, which provides a laundry list of ideas for transforming your office–home-based or otherwise–from a liability into a performance enhancer…

If you have any fantastic tricks you'd like to share, please do so in the comments.

Enter David Teten

When Arnold Schwarzenegger first came to America, he and fellow bodybuilder Franco Columbu worked during the day as bricklayers. Their work was their workout. When they weren't laying bricks, they were hitting the gym hard and heavy.

Unfortunately, most people aren't so lucky, and ass-in-chair time has costs:

- As the New York Times recently wrote, sitting kills.

- In a study that tracked over 17,000 Canadians for 12 years, researchers found that people who sat more had a higher risk of death, independent of whether or not they exercised.

- According to a 2003-2004 U.S. survey, Americans spend over half of their time awake sitting.

- In an article published in the British Journal of Sports Medicine, researcher Elin Ekblom-Bak found that "after four hours of sitting, the body starts to send harmful signals" that cause the genes regulating glucose and lipose levels in the body to shut down.

A small number of offices across the country have slowly begun to endorse the idea of exercising during work (e.g. walking on a treadmill while doing your job at Mutual of Omaha). Besides the obvious fitness benefits, exercise also increases productivity (according to research done by the Vermont Board of Education — PDF download).

Most surprising of all, remaking the workplace into a healthy, exercise-supportive environment has a cost benefit. Many of the design changes we have implemented cost little or nothing.

Below is a list of the key features of our office. We hope that more companies will embrace this alternative way of working, and ultimately improve the well-being of all their employees.

Desk Setup

Every person in our office has a choice of three desk setups:

1. Standing desk ($200-$750) with anti-fatigue comfort mat ($20-$40).

We use electronically adjustable desks, built from an IKEA top and Workrite frame and legs (ordered through WB Mason). These were the most attractive standing desks we could find at a reasonable price. They move up and down at the push of a button, making it easy to change to a sitting position when needed. For another look at a typical standing desk configuration, click here.

2. Exercise ball ($40) to sit on in lieu of a conventional chair. Exercise balls help build core stability muscles, thereby reducing lower back pain and injury. We particularly like the Trainerball ($35), which has ball exercises printed directly on the ball. We also have yoga ball bases ($11) to prevent the balls from rolling around the office. The cost for this combination is much less than a conventional office chair.

3. Conventional seated office chair ($150-$800), with the optional balance cushion ($15).

We're happy to report that, after working in this environment for more than three months, a majority of the people in our office have chosen to use standing desks or exercise ball chairs. Many folks, including myself, periodically switch between the two.

We encourage having multiple large computer screens ($180 each) at each desk, space and budget permitting. Multiple computer screens increases productivity and efficiency.

We strongly suggest using a monitor stand ($25). The GTMax stand ($60) supports up to 30 lbs, is fully adjustable up to 22 inches, and allows for desk space usage underneath the monitor. Unfortunately, it's only strong enough for laptops, not stand-alone monitors. There are countless stands that provide a few inches clearance from the desk, but for anything higher, the only options we've found thus far are either not adjustable or not strong enough.

Everyone in the office is offered an ergonomic keyboard. We recommend one of these, in ascending order of distance from a conventional keyboard:

- Kinesis Advantage Keyboard ($269)

- Goldtouch Adjustable Keyboard ($95)

- Datahand ($995)

For a mouse, we really like the Designer Appliances E Quill AirO2bic mouse ($90), used with a TrainerBall Mousepad ($10), which includes suggested ergonomic exercises.

We also suggest people consider using:

- Hand grippers ($20) for relieving stress and improving grip strength. A tennis ball is a cheaper alternative.

- Wobble boards ($12-$55) for use when at a standing desk. These work out your lower body continuously.

- Pedometers ($20) or pedometer apps, for tracking miles walked per day. People wearing a pedometer walk about 27% more per day than people not wearing a pedometer.

Shoes

Many of us wear minimalist (a.k.a. ' barefoot') shoes, which have very thin, slipper-like soles. I particularly like Sockwas ($40-$50). The black Sockwas Amphibian is my all-time favorite shoe for both work and weekend wear: it has a minimal sole, is inexpensive, and doesn't draw unnecessary attention to itself. I also wear Vibram Fivefingers ($83-$92), which look like gecko feet, for training/outdoor activities.

Sergey Brin has appeared at several conferences wearing his Vibram Fivefingers. As the old joke goes, "What's the difference between 'crazy' and 'eccentric? A few million dollars."

Of course, we understand that not all offices will be as tolerant of idiosyncratic footwear. When I'm in a fundraising meeting or a more conservative environment, I use my Bally Pakos Lace-up ($500) which have the most comfortable minimal sole of any men's business shoe we've encountered. For women, we suggest VivoBarefoot shoes.

Conference Rooms and Meetings

We have four conference rooms: one room has exercise balls ($40-$150 each) in place of chairs, and three conference rooms have conventional office chairs ($175 each).

We considered having a conference room with a standing conference table ($950 on up) and anti-fatigue mats. We've seen research that indicates standing meetings run much faster than sitting meetings, and we often have more informal standing meetings at our standing desks, discussing screen-dependent documents and individual projects. In our experience, the standing-only work set up has increased active participation and sharing of ideas.

The Galileo room features many spheres. It has been a favorite among visitors.

When the New York weather allows and when a meeting topic doesn't require taking extensive notes, we have walking meetings. This is an easy way to integrate more exercise into the day.

Office Layout

There is significant evidence that people need exposure to natural light, so we've designed the office to maximize windows and natural light. [Check out this article for ways to do this.]

Our office has almost no walls; it's primarily set up in an open-floor layout. The walls that we do have are made of glass, which allow us to write notes on them. This way, we don't need any whiteboards. We believe the transparent layout helps to create a more transparent culture. If we didn't have so many writeable glass walls, we'd use IdeaPaint ($50), a new kind of paint that allows any wall to be used as a dry erase board.

Given that social capital correlates with physical health (see Bowling Alone), we want to encourage people in the office to get to know one another. At the front of the office, we're creating an office map showing the names of our portfolio companies, and the photos of the employees that work at each.

Some other ideas we like, but can't yet execute in our current office for logistical reasons:

- Sprung floors, ($15/square foot). This flooring absorbs shocks, and give it a softer feel. Such floors are considered the best available for dance and other indoor sports. They enhance performance and greatly reduce injuries. Although we don't do too many jetés in our office, these floors are a pleasure to use, particularly when wearing minimal shoes. A wobble board ($12-$55) or balance cushion ($15) is a much cheaper substitute.

- Pull-up bars ($30), for periodic pull-ups/muscle-ups when you have an occasion. In our office most of the doorjambs are glass, but if we expand to another floor we may have the option of installing pull-up bars on doorjambs made of wood. New York startup Workmarket has a pull-up machine at the front of their office, next to a list of the records set by people who have visited the office.

- Treadmill desks ($400-$2,000). The user walks slowly while talking to clients, writing proposals, checking email, or any other activity one would normally do at a desk. You could integrate ReRev into these treadmills; the company retrofits exercise equipment with a device that recycles excess energy created. At least for now, we've rejected this idea because of our concern about noise pollution.

- Showers, for people to clean up after jogging or biking to work.

- Nap room, for when our team needs a little rest.

Food and Snacks

In the holistic spirit of our initiative, we wanted to introduce healthy food options into our office environment. But like most offices, we have a range of dietary preferences: slow-carb, paleo, vegan, kosher, vegetarian, and 'don't care.' Finding a solution that keeps everyone happy is non-trivial.

We turned to our favorite health authors (such as Michael Pollan) for guidance, each of which suggested all-natural unprocessed alternatives to the more common industrialized foods. In Pollan's words, "Eat food. Not too much. Mostly plants."

Here is a list of snacks that we think are consistent with our food philosophy and appropriate as hors d'oeuvres, for instance, when we host periodic idea dinners, intern lunches, etc.:

- Organic vegetables: Edamame, avocados, carrots, celery

- Organic fruit (fresh and dried)

- Organic dips: Guacamole, bean dips, hummus, sugar-free applesauce

- Whole cottage cheese, or whole yogurt

- Mixed nuts (unsalted)

- Mini-brown rice/sesame cakes (unsalted)

We also serve free beer and red wine on Fridays. Studies suggest that light to moderate alcohol consumption can be quite healthy, particularly for the heart.

Finally, we have a list of local healthy restaurants and recommended meals (which we keep in our office Dropbox folder), and are considering signing up for Foodzie to find new exotic foods.

Einstein, the main conference room, includes a wine rack. We hold regular idea dinners, intern lunches, board meetings, and other events in this room.

Culture

Every office has a culture; the question is whether you create and influence that culture, or if it just happens haphazardly.

We're trying to create a health-focused culture, without making people feel pressured and uncomfortable. In a traditional office, a single person using a fitness setup (e.g. ball chair) might draw unwanted attention, but we've designed the culture of our office to encourage experimentation. If someone turns down an opportunity to work with us because they're uncomfortable with our culture, that's okay. We consider this the price of having a clearly defined culture.

Other Ideas

We have a lot of ideas that are probably too radical for our office; implementing them would likely make some people uncomfortable. However, you might be able to use some of these ideas in your own office or home:

- "Shoes-discouraged" policy, with a shoe shelf ($30-$300) at the office entrance. In most Japanese homes, no one wears shoes. Lloyd Blankfein, CEO of Goldman Sachs, famously used to wear just his socks around the office. Victor Niederhoffer, a prominent trader, had a sign at the entrance to his Park Avenue office, saying, "Please remove your shoes."

- Squat toilets ($450). These are extremely common in Asia, but highly unusual in the States. Squatting while going to the bathroom is significantly healthier than sitting on a conventional western toilet.

- Group morning exercises. Many Japanese workplaces start with a fixed set of morning calisthenics. Our portfolio company Kohort does a group daily pushup routine.

Rejected Ideas

We explored many other ideas, but ultimately abandoned them for not being based on research or sound reasoning. For instance, we looked into full-spectrum lighting after hearing that this new technology (which mimics natural sunlight) was supposed to enhance productivity. We rejected it after reading multiple studies which found no conclusive evidence on its benefits.

We also rejected having air purifiers and ionizers, which remove pollen, dirt, dust particles, and allergens. A prominent study showed that such air purifiers often emit ozone, which damages the body and thereby negates the benefits.

We considered buying health-oriented vending machines (h.u.m.a.n. Healthy Vending, 2bU), as often the choice to eat unhealthily is one of convenience, not conviction. Most of the products available in these machines were too processed for our preferences, but if you can't provide some of the healthier food options listed above, these vending machines are certainly better than the conventional ones.

Finally, we thought about using e-readers to reduce eye strain, but the data is lacking on whether e-readers or reading on paper significantly reduces eye-strain (versus reading on a traditional monitor).

Closing Thoughts

Winston Churchill said, "The Americans will always do the right thing… after they've exhausted all the alternatives." We've now reached the point where 63.1% of adults in the U.S. were either overweight or obese in 2009.

In other words: We've exhausted all the alternatives.

As my wife says, the US doesn't have a debt problem; we have a healthcare problem. The rebounding movement towards a healthier lifestyle in the office will create significant investment opportunities, and we're actively looking for companies that fit our portfolio. For instance, our investment in BetterWorks was in part driven by our belief in the importance of employee benefits for highly qualified people.

If you know of a product, service, or company that's working towards improving the office environment, please tell us about it in the comments section below!

###

Special thanks to Duncan MacDonald-Korth and Matt Fairbank for their help researching this post.

Tobi Lutke, CEO of Shopify. How did they turn a $100,000 prize into $12,000,000 in transactions?

In the world of magazine articles, one of my all-time favorite headlines is "Anything You Can Do, I Can Do Meta" from the MIT Technology Review, a feature about billionaire programmer, Charles Simonyi. Charles designed Microsoft Office and is outstanding at looking at programming as different layers of abstraction.

How can we raise our perspective from 5,000 feet to 30,000 feet to learn a few things? This post will do that with competitions.

Today, Shopify, a start-up I have advised since 2009, announced the winners of their Build-a-Business Competition, featuring a grand prize of $100,000 cash. Winners were determined by combining their two highest-revenue months in an 8-month competition window.

I want this post to show two things, and the second is where meta comes in:

1) How the competition winners won and key lessons learned in taking their products from ideas to profitability. This includes manufacturing, marketing, PR, and just about everything in between. I've looked at these types of lessons before.

2) How Shopify has used these competitions to build their own business several-fold and cross the chasm from early-adopter to mainstream. This is something I've never written about…

To avoid any linguistic nitpicking, I'm using the definition of "meta-" from Wikipedia:

Meta- (from Greek: ???? = "after", "beyond", "adjacent", "self"), is a prefix used in English (and other Greek-owing languages) to indicate a concept which is an abstraction from another concept, used to complete or add to the latter.

Let's address creating competitions first and winning them second.

This post might have a few typos in it, as I'm at the hospital with family. If you like, please point them out in the comments and I'll do my best to fix them.

Creating a Competition Yourself

Let's look at the stats first, and then lessons learned.

THE FIRST COMPETITION



Tobi, Shopify's CEO, and I hatched plans for the first Build-a-Business competition over the phone in 2009. It was announced in December 2009 on my blog, and–as you can see from the afterword and scrambling in the initial post, which I suggest you read–it wasn't perfect.

The imperfection didn't matter, as nothing is perfect the first time, especially if you're ambitious. The protocol is: ready, fire, aim. But when the competition wrapped up, despite the bumps, Shopify had made leaps across the board:

- From a revenue standpoint (for Shopify), they'd killed it, right alongside their competitors. Here are some stats:

Revenue PER HOUR for the duration of the contest (180 days): $696.38

Total number of people competing: 1,819

Total number of orders placed: 66,503

- From a media standpoint, they'd jumped from niche to mainstream, including The New York Times.

- Larger, more recognizable brands, like GE and Angry Birds, suddenly chose Shopify as their e-commerce platform, even though these companies could afford custom solutions.

- Shortly after the competition closed, Shopify was able to secure $22 million in Series A and B funding from world-class firms like Bessemer Venture Partners, FirstMark Capital, Felicis Ventures (Hi, Aydin!), and Georgian Partners. These funds were then used to accelerate expansion, as Shopify was already profitable. Funding isn't just for floating the boat, keep in mind; it can be used to add rocket fuel to a successful launch.

- This leads us to 2012. In February, Shopify was named one of Fast Company Magazine's top 10 most innovative retail companies in the world.

THE SECOND COMPETITION AND LESSONS LEARNED

Flash forward to the new competition, which was made international (3 of the 8 winners were Australian), and you can see both huge growth and a fascinating trend:

- 3,060 competitors (versus 1,819 in 2010)

- More than $12,000,000 worth of products sold (almost 4x the $3,543,191 in 2010)

- Closely related to the preceding point: Average sales per store were up 56% compared to 2010. Why? Shopify dramatically improved their educational and support efforts this time around.

The trend? Three of the winners–Coffee Joulies, Neu Year, and Opena Case–used Kickstarter to raised funds for manufacturing, and all of them exceeded their fundraising goals, some by miles. Joulies, for instance, aimed for $9,500 and raised more than $300,000! Kickstarter and similar tools were the focus of my recent post, "Beyond X PRIZE: The 10 Best Crowdsourcing Tools and Technologies." It's fun to see these services and technologies converging to create companies.

More on that later, but let's look at some of what Shopify learned through this all. For instance: what type of lawyers do you need, if any? What are the pitfalls? I asked them to find out.

- What were your primary lessons learned in the first competition?

"We learned in the first contest that just announcing a contest and giving out prizes wasn't good enough. This year, we used social media to help promote our new shops and to bring truly educational content to them. It paid dividends. Mentorship was a major focus of this contest (Tim Ferriss, Seth Godin, and Gary Vaynerchuk)."

- What type of lawyers or other help did you need, and how did you find them?

"The laws concerning contests are different in every country, even in different states. Contest rules are a legal contract between the contest sponsor and anyone who enters the contest, so they should be taken seriously. The potential downsides of mistakes include lawsuits and more.

We found our first lawyer by looking for thought leaders. We read articles written on contest law and contacted the authors who were lawyers. Since were on a budget, we looked for sole practitioners instead of big firms.

For a simple contest, you can go through a 'Contest Fulfillment company' that can use their lawyers to draft the rules, oversee the process, and "audit" everything to ensure the winners are not committing fraud or breaking the rules. If you're sending materials to contestants (e.g. we sent books to everyone), such a company will also do the mailing, etc."

- Above the prize amounts, what costs should start-ups expect to incur? What unexpected expenses did you guys experience?

"Legal expenses, especially when doing multiple countries, adds up really quickly. If you have all your details figured out before going to your lawyer to draft the rules, you save a lot of time, which equals money. Even a minor change costs a lot when it's done by a $500/hour lawyer.

We offered a lot of travel prizes during this contest, so you have to estimate those costs carefully. This isn't easy because you don't know where your winners will be from and how much hotels and flights will cost. We also gave away thousands of books to people who entered the contest.

It turned out that these were much more expensive to ship than we had originally thought, especially to Australia. Next time, we would probably focus more on e-books and digital goods."

[Notes from Tim: This is why specifying if you'll accept contestants from outside of your own country is critical. Constantly ask yourself: "What could go wrong here? If I wanted to game this, how would I?" and run through a hypothetical sign-up in your mind. Where will users be confused, or ask "Now what?" For example, if you have a submission deadline, have you listed the time zone? What do you do if someone has a tech problem (server issue, WordPress issue, whatever) with submission outside of their control? Try and cover as many of the what-ifs as possible in your rules so people don't get upset.]

"When it comes to prizes, money isn't always the biggest motivator. Anyone can write a check. Look for prizes where perceived value is greater than actual cost. In our contest, we are gave away a dinner with Tim Ferriss, lunch with Seth Godin and a meeting with Gary Vaynerchuk. These are literally priceless things that people can't get on their own."

- Any other tips for people wanting to hold their own competitions? Warnings or otherwise?

"Know what your objective is. For us, it wasn't primarily about getting media attention, for instance. That was a fantastic side-effect, for sure, but our main goal was to attract customers who wouldn't have come to us otherwise.

Consistent support and info sharing is also critical. Just bribing people to do big things often isn't enough. Building a community where people could share best practices is what made 2011 so much bigger than 2010.

If you're offering a large prize, definitely consult a lawyer specializing in that area, and most big firms will have a few."

Winning Competitions

Let's look at this year's winners, what they did right, and what they did wrong.

Grand Prize Winner: Coffee Joulies

Who are you and what is your Shopify store?

Dave Petrillo and Dave Jackson, owners of joulies.com

How did you decide on your product? What ideas did you consider but

reject, and why?

Coffee Joulies was just one of an unending stream of ideas we would

toss back and forth over gchat while avoiding doing actual work at our

jobs. What was different this time is that we put our foot down and

said enough was enough. A Joulie is made of two parts: the shell and

the filling. It was the simplest idea we had ever come up with. We

decided it was time to step up and actually make this idea a reality.

There was no way we were going to create an entire business without

figuring out whether people would want the product first. We focused

on rapid prototyping for proof of concept and then manufacturing

alpha-stage Joulies ourselves to see if people would actually buy

them. The goal was to get Joulies into the hands of customers as fast

as possible and let them tell us whether or not they liked the

product, ignoring all the other flapping heads who love to shoot down

ideas to make themselves feel better.

We put up a website and offered Joulies for presale, and pretty much

nothing happened. How do you attract customers to buy a product that

has never existed before? We needed a way to tell the world about our

idea. Kickstarter was our soapbox. We launched Coffee Joulies on

Kickstarter during April of 2011 and ended up getting funded 3,230

percent over our goal from 4,818 backers in 57 countries. It was clear

that we had a hit product on our hands. After fulfilling our

Kickstarter orders we turned to Shopify to build Coffee Joulies into a

business.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

The first tipping point for Coffee Joulies occurred on day two of our

Kickstarter campaign. We had emailed Uncrate, Gizmag, and Gizmodo with

a press release and high resolution images hoping one would pick up

our story. All three posted about us. Next on our list was TechCrunch,

but before we could email them we found out they'd already picked up

our story. We were viral.

The second tipping point came after Dave and I read "The Lean Startup"

by Eric Ries. We were on the verge of jumping into a number of large

batch processes, like an expensive website deployment and a $60,000

progressive die purchase. In the context of "minimum viable product"

(MVP) it became painfully obvious that these big, enticing projects

were not the way to go. Ever since then our focus has been on reducing

cycle time and closing the feedback loop. It has fundamentally changed

how we do business.

The third tipping point came as we wrapped up Kickstarter fulfillment

in November. With MVP on our minds we used a bone version of the

simplest Shopify template that was available to create our website. We

learned a lot as we released the Gift Pack at $100 and then the Set of

5 at $50, and we had it timed so well that we sold out of everything

at 9am on the last day that orders could be placed and still be

delivered in time for the holidays. What more could we want?

What were your biggest mistakes, or biggest wastes of time/money?

We underestimated the amount of time it would take to fulfill our

Kickstarter orders by about a factor of five. We spent a huge amount

of time in central New York solving manufacturing problems at the

factory. During that time we definitely could have spent more time

honing our marketing message and performing A/B testing while the only

thing we were selling was an opt-in to our email list.

We were extremely careful with our money from Kickstarter because we

knew it had to last until all of the orders were fulfilled. That said,

we were tempted on a number of occasions by big-ticket items like

expensive manufacturing equipment, apartments in San Francisco, and

marketing firms. Looking back now we dodged quite a few bullets. The

money we made selling on Shopify came in so fast that we really didn't have time to blow it. The majority was reinvested to build up

inventory once we learned we had won the Build-a-Business competition.

Key manufacturing and marketing lessons learned?

Key manufacturing lessons: The simplest idea you have will still be

extremely difficult to manufacture, test, and deliver to the customer

in a timely manner. It will also cost more than you think.

Key marketing lesson: At some point the free PR will dry up. Then what?

If you were to do it all over again, what would you do differently?

It's hard to imagine doing this any differently than we did. We

approached all of our hurdles as learning opportunities and took them

one step at a time so we could find the easiest/fastest way to succeed

and then move on. The only big decision that could have really

changed things is if we had taken on an investor towards the end of

our Kickstarter campaign. There were plenty of times when we wished we

had extra capital, experience and manpower, but who knows where we

would be now if we had, for better or worse. The grass is always

greener.

What's next?

Moving beyond the internet. Coffee Joulies look great online, but

really are amazing when you hold them in your hand. Also, plenty of

other drinks could use temperature stabilization…

Home Category Winner: Neu Year

Who are you and what is your Shopify store?

Jesse Phillips, designer and owner of neuyear.net

How did you decide on your product? What ideas did you consider but

reject, and why?

I'm a web designer, caught-up in the web-startup gold-rush. So, naturally, I have several web startup ideas. But, since this is my first startup attempt, I wanted to try something easy – something easy to make, inexpensive to test and simple for customers to accept or reject. So I went with the calendar: very easy and cheap to make prototypes, test them, easy to execute, setup Shopify, etc.

Also, with the recent buzz around productivity and productivity products, I thought a new productivity product would have a better shot. And seeing the success of Moleskine and Behance (essentially cooler tools for productivity) – I thought a cooler calendar would have some legs. Finally, since there's not much competition in the calendar market, and I wanted one myself, I saw an opportunity in the market, and took it.

I have 49 other ideas that I rejected for my first venture because, although they are more sexy and potentially have broader appeal, they would require a lot of effort and cash to startup, and they are in crowded markets. The calendar seemed like the easiest, most simple opportunity for me grasp.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

Since I have no money and I was wasn't sure if this would work, I decided to do a test (like you suggested) on Kickstarter. We created a campaign to raise $5,000 – just enough to do our first print-run of 1,000 calendars and ship 200 of them to our backers. We were so excited and thought we had the perfect price point to raise at least $10,000. We BARELY made our goal of $5K. This was super discouraging. My mom gave a HUGE donation early on, without which we would not have made it, and that would have been it.

Fortunately, we made it. That was a small tipping point. The big tipping point was when we got on Fab.com. Before Fab, we had been selling for about a month online. In that time we had only sold about 100. It was slow.

When I sent a calendar to Fab it took them a little while to get back to me, but they liked it and wanted to do a run. I had no idea what to expect. I thought – "Ok, maybe we'll sell 100, or 200 at the MOST." 3 hours after we started the sale, we had nearly sold-out 400 calendars! They called me excited and asked for 400 more! This was one of the best feelings of my life – this established company was excited about the performance of my product on their network! Wow. It was then that I realized our product was viable (niche, yes, but viable).

Let me also say that it seems impossible that the calendar has sold as well as it has (not that it's been overly amazing). I honestly believe that Jesus, who is in charge everything, has allowed it to work-out, and I'm thankful for that!

What were your biggest mistakes, or biggest wastes of time/money?

We are new to this, so we made several mistakes:

1. I just entered into an agreement with Groupon. The margins are very tight. From the way we were talking I was virtually promised to sell 10,000. I got caught up in the frenzy of it and made a deal with little to no margin on 5,000 and slightly better on 10,000. I'm looking at our sale right now and we've sold 1,700 :( Looks like we're going to lose money, potentially thousands of dollars, if we don't sell a lot in the next 24 hours.

2. We didn't test our product with consumers enough, or at all. If we had, we would have learned what we learned shortly after launching: people want more than 1 box for the weekend. See, our calendar was aimed at businesses (I guess?) that would focus on the work week, so we put Saturday and Sunday in one box. I thought we were so innovative. Well, I've gotten over 100 emails of people wanting the weekend to be split out. And they want dry erase. We didn't think of either of those. And we've probably lost at least 500 sales because of it. We should have really tested this with consumers before hand.

3. Didn't research how to get into retail outlets. I'm only now learning how that is done and it seems we're too late to get into retail outlets for 2013 (not 100% on this, but it seems like it).

4. Didn't do enough research on printers, shipping, etc. We could be getting better pricing on stuff, I'm only now finding this out.

5. Didn't market the product well – don't really know how to do that. Paid for too much advertising that never turned-in to sales. And didn't beat the pavement enough to get free PR on blogs.

Key manufacturing and marketing lessons learned?

Study the crap out of your manufacturing process, so you can find the cheapest way to do it and make sure the quality is good. Get samples. Understand what you're doing. Plan better, so you can make good estimates and make more at one time. Do one run of 3,000 instead of 3 runs of 1,000 (duh!).

Marketing is tough! Be careful how you spend money. The best marketing is free word of mouth, and for us, relevant blogs. Like Gary Vaynerchuck has said, you have to crush it, find EVERY relevant blog, comment on it, read the posts, find the players on Facebook, email them, go, go, go, email, email, email, comment, comment, comment. Make friends. This is tough work. But it pays off big.

Turns out, one of our best sources of click throughs to our site has been Pinterest.com. Use google analytics, analyze that junk, figure-out where sales are coming from, who your target market is, and reach those folks. This is hard to do, and I suck at it, but our sales have been better when we do this.

Do a contest. One our most successful campaigns was a contest where you were entered to win a $20 amazon gift card, if you tweeted about the contest. We saw a large jump in sales around this time. It helped a tiny, nobody company like us get the jump in exposure we needed.

If you were to do it all over again, what would you do differently?

I would do more research on our product – making sure we had tested all the features with real people (the problem with this is we had lots of skeptics early on, so you can't always listen to your critics – it's a balance I guess). I would pound the pavement a lot harder before the Kickstarter campaign to try and drum-up support ahead of time – asking people to blog at specific times during our campaign.

I would have (and I should be) continually contacting influencers (bloggers, tweeters, media outlets) and sharing our product with them – to try and gain free "word of mouth" advertising – which seems to be our most cost effective mode of advertising (but I'm no expert).

What's next?

We will be making a school year version soon. And we're making a larger version for teams. Perhaps even making specific versions for Moms, Teachers, Churches, etc. I've got tons of other ideas (my enemy, I know). I'm inspired by Studio Neat's products, and I have an idea for a simple tech accessory that everyone will want next year.

Other Category Winner: Opena

Who are you and what is your Shopify store?

Chris Peters and Rob Ward of openacase.com

How did you decide on your product? What ideas did you consider but

reject, and why?

Because of our backgrounds in design and tool making we knew we had the skills to design a product but we didn't have the capital so we turned to crowd funding to help raise the funds need to produce it. Many late nights trawling successful kickstarter projects led us to the following:

- Impulsive price point of around $50, people have less objections to buying products around this price point, but it also meant that our particular product could be manufactured to a very high quality due to the low manufacturing costs.


- Had to be a suitable size for postage – after all we were going to be shipping these things world wide so we don't want something the size and weight of a house brick!


- Wanted to piggyback off the back of another popular trend/product.


- Needed to fill a niche that had little competition.


- Had to have a unique feature that would make our product stand out from the crowd.


- Have a decent margin to allow for marketing, advertising, affiliates, wholesale, and promotion etc.

We rejected a few other ideas mainly because they were too complex, too expensive to manufacture and did not have the broad appeal of the Opena Case.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

There we're quite a few but three in particular stand out. The first was when we showed the final prototypes to people for feedback. When we asked for them to hand it back they asked if we wanted to sell the prototypes. When we explained that we couldn't sell the prototypes they became very disappointed and were reluctant to hand them back, so right then we knew we had a product people wanted. The second was when we put the idea on Kickstarter and realized that lots of people loved the idea and we're willing to put money towards it to make it happen. Nothing better than having your idea validated by people voting with their wallets. The third was when Ashton Kutcher tweeted about it to his 7 million followers!

What were your biggest mistakes, or biggest wastes of time/money?

Our biggest mistake was not having enough faith in our ideas from the beginning. We should have launched our own product years before we actually did it, although it would have been much harder without awesome businesses like Shopify and Kickstarter!!

Key manufacturing and marketing lessons learned?

Get your product right before you ship! Our original design has some flaws that we overlooked during prototyping. This costs us time and money as we had to modify the production tooling and change the design before we could start mass production and fulfilling orders.

Things always take longer than you have been quoted…always!!

Don't underestimate the importance of packaging! Our original packaging was designed to keep shipping costs low, however, retails stores thought it looked cheap. This effected the initial uptake into retail stores but once we updated the packaging to suit the retail environment the stores and distributors started placing orders.

If you were to do it all over again, what would you do differently?

Jump in earlier, the only thing from stopping you from doing it is YOU. Get feedback from as many people as possible and let them figure out what you have overlooked. Don't be afraid to take pre-orders but make sure you have your product ready to ship when the Ashton Kutcher starts tweeting about it!

What's next?

We've formed a company (annexproducts.com) to allow us to continue to produce awesome innovative products. We've signed up a global distribution partner and we're just about to hit the go button on production of our second product the Quad Lock Mounting System which is a revolutionary case based mounting system designed for the iPhone 4/4S. Once again we validated the idea on Kickstarter and using social media and we're now taking pre-orders at www.quadlockcase.com which will be shipping in March.

Apparel Category Winner: FlockStocks

Who are you and what is your Shopify store?

Sophie Kovic, huge Tim Ferriss fan and owner of flockstocks.com

How did you decide on your product? What ideas did you consider but reject, and why?

I read the 4-Hour Workweek and carefully followed the steps. In the book it mentions using the Adwords Keywords Tool to find opportunities in your area of knowledge. I already had some understanding in the beauty section and so whilst searching in that general area I uncovered the rising trend of Feather Hair Extensions. The competition on that keyword was low and the global monthly searches were pretty high. I decided to test the idea. I set up a testing website using Weebly and made 11 "sales" in four hours! It proved it was a winner before I had invested any money, which was essential to me as I only had about $3,000 in my account at the time.

Some other ideas I looked into were pancake pans, bongs and tobacco pipes, nylon stockings and generators. I rejected each one after Adwords testing with test websites. None of them sold the way I'd liked and none of them were really areas I knew anything about. Although I still think the generators have potential I don't like the idea of posting and storing heavy, bulky items.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

My business was successful very quickly. It was due to the fact that I had no competitors on Adwords and as a result I got a big chunk of the marketshare just by being there and in stock. Competitors were finding it hard to find supply and all I had to do was be visible and I made sales. So the tipping point would only be marked at the point I came into supply and posted my Adwords ad.

What were your biggest mistakes, or biggest wastes of time/money?

The mistakes I have made I am still making! I try to employ the 80/20 principle but have been slow to apply it to my customer base. I have managed to secure some good distributors now but regret I didn't start sooner. I've probably wasted a lot of money on using Adwords incorrectly too. But I've kept it pretty lean in most aspects, especially in terms of time. We spent 3 of the past 9 months in business on a mini retirement in Thailand. The book really taught me to trust people to do their jobs correctly. It was a great freedom. I probably could have stayed home to run the business and make it bigger and better over that period, but I was after the freedom at the time as we'd had a difficult couple of years.

Key manufacturing and marketing lessons learned?

Good blogging drove me lots of traffic for free. Certain celebrities were wearing feathers in their hair, so I blogged about them and it drove traffic to my site for months. Celebrity endorsements for products like mine are an amazing way to create interest. Somehow I got on a mailing list for a PR company that organizes celebrity events and it really opened my eyes to how it works and how little it can cost. I nearly put my feathers in the gift bags at the Golden Globes this year.

In regards to manufacturing, we didn't really have much to do, more like plucking and packaging. This was about finding people I trusted and creating clear objectives, roles and standards. I found someone I trusted who understood what I wanted, then delegated, so all I did was the orders and the ordering.

If you were to do it all over again, what would you do differently?

I would secure distributors earlier on.

What's next?

We are working to launch our new range of human hair extensions. We have created a grading system that makes it easy for the consumer to identify what standard of hair they are buying. The brand is called Lockstocks and will specialize in selling high quality human hair extensions to salons.

We also have a passion project in the pipeline, where we hope to help people recover from depression without medication. It is based on my partner Tim Butterfield's research. We have written an eBook and are currently learning how to promote it.

Art Category Winner: Tattly

Who are you and what is your Shopify store?

Tina Roth Eisenberg, aka Swiss Miss, owner of tattly.com

How did you decide on your product? What ideas did you consider but

reject, and why?

I had the idea for Tattly one day in June of 2011 when I applied yet another hideous, badly designed, cheap temporary tattoo on my daughters arm. I simply told myself: "I can continue complaining about this or I can do something about it!" And I did. I took matters in my own hands, reached out to some of my wonderful designer friends to see if they'd be interested in designing tattoos. I had no idea but I opened floodgates. They all said yes and within hours I had first mockups in my inbox. I designed the site, built it and we launched mid July. The internets went crazy and on the second day we even got a call from a very prestigious store in London that asked us for a Wholesale catalog. Little did they know we *just* launched our site. It's been quite a ride ever since.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

Interestingly enough the tipping point was right during the first few days. It was obvious right off the bat, that the world was, in some sense, waiting for designy temporary tattoos. The excitement for Tattly seems unstoppable.

What were your biggest mistakes, or biggest wastes of time/money?

We haven't had time to experiment much up until now, so no big mistakes come to mind. I am sure we will have plenty ahead of us as we grow the business. I feel like the hardest part is right ahead of us. We are only 7 months old and we now have to really figure out how to scale.

Key manufacturing and marketing lessons learned?

Find a manufacturer you love and that is pleasant to work with.



Make sure you have enough resources to offer immediate and personable customer support.




People *love* receiving packages that have a personal touch. We put real (and cool) stamps on our mailings and people go nuts over it, which often ends up in a tweet of the stamps.




Put some love into the design of the invoice, these things don't go unnoticed.



Be prepared to be ripped off; protect your intellectual property from the start.



It's never too late to reinvent an existing product.

If you were to do it all over again, what would you do differently?

I would (mentally) prepare myself for success. I started this project more or less as a joke with a side project mentality. While there is nothing wrong with that, I wish I would have built the website so it would scale better so I didn't have to completely redesign and rebuild the site from the ground up 4 months later. Lesson learned.

What's next?

Growing Tattly and getting it into lots of designy stores, all around the globe.

Food and Drink Category Winner: Simply Hops

Who are you and what is your Shopify store?

Eleanor Downes of simplyhops.co.uk

How did you decide on your product? What ideas did you consider but

reject, and why?

Simply Hops parent company has been supplying major brewers in the UK with Hops for many years. We were aware of the growing supply of craft beers. That is beers brewed on a small scale, generally by small organisations. We analysed the market data available from the Society of Independent Brewers (UK). From this we made estimates of the likely demand for Hops. It was apparent that each customer (potentially over 800 in the UK alone) would take relatively small volumes of hops, and we judged that these would not be as price sensitive as major brewers. We investigated the offer from our competition, and although many customers seemed satisfied, they were looking for alternatives. Our competitors were attempting to service the market in the conventional way, i.e. sales people, phones and bespoke arrangements for delivery. We reasoned that a properly run e-business, could offer improved service (next day delivery) and significantly lower transaction costs. There is keen interest in exotic hop varieties which impart unique flavours to beer. We judged that our links through parent companies and associates would give us a competitive edge in sourcing these varieties. We considered entering this market in a conventional way, but rejected it in view of high costs and lack of novelty compared to the competition.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

We launched the company with a conventional marketing event and advertising and started to get some initial orders. As part of this process we spent time with potential customers and it soon became apparent that most are avid networkers and users of Facebook and Twitter. We decided to explore the use of these media but to respect their social status and avoid a "hard sell". We just advise of significant events. A definite a-ha moment was seeing how quickly our customers responded and how quickly our number of followers grew. In one case, we announced on Twitter that a particular American variety of hop was now available. Within 2 minutes, we had our first order! The other key learning point was to understand how our customers plan. Sometimes the brewery owner is also the accountant, and head brewer and sales person. They are just busy. If they decide that next week they would like to brew a particular recipe and they can then go online and order what they need then convenience is a big benefit for them. We had judged that having more specialised varieties would be attractive to our customers. We were able to introduce these fully in January 2012 and this led directly to more than doubling our monthly turnover.

Following our launch event, we reviewed how we should get more information to our customers. We concluded that meeting with brewers during normal working hours would not work. Who would brew the beer if the head brewer was in a meeting! So instead we organised an evening session with light refreshments. We are also seeing the benefits of an e-model. Some of our customers make good use of the fact that they can order time of day.

We also learned that providing an efficient phone service was really important. It's surprising just how many people say that they can collect the goods to avoid carriage charges when they are located hundreds of miles away. A pro-active call from our customer sales manager has led to some very positive feedback. Also in the event of a glitch (usually with the freight side) we are usually able to fix problems very quickly.

Through Shopify, we were also able to see where are main referrals were coming from. We learned that inserting a click through banner on a home brewing forum really accelerated the process.

What were your biggest mistakes, or biggest wastes of time/money?

Early on in the life of the business we received enquiries from customers who did not feel that they should pay by credit card. We accommodated this initially, but this led to some complications with stock management and has now been discontinued.

Key manufacturing and marketing lessons learned?

It has taken us some iterations to get our pricing policy sorted. The initial set-up part of the configuration would have resulted in Simply Hops running a manufacturing operation. We quickly realised that this made the model overly complicated and stuck to our original intent to trade finished packed goods only.

If you were to do it all over again, what would you do differently?

We would spend more time up front defining our sales order/fulfillment process and clearly articulating who is responsible for what. This would save a lot of wasted effort and confusion. We would also think more deeply about building our social media presence, and presence in industry forums and relevant areas.

What's next?

A few ideas that we want to keep from the competition! We have been successful in sourcing a number of really interesting new and old varieties of Hops. Some will be known to some brewers and some are completely new and "straight out of the breeding programmes". We plan to introduce improved packaging to make using our hops much easier and improve availability in smaller pack sizes.

Canadian Winner: Clearpath Robotics

Who are you and what is your Shopify store?

Matt Rendall of clearpathrobotics.com

How did you decide on your product? What ideas did you consider but

reject, and why?

Clearpath Robotics started in a university robotics lab. Having experienced huge frustrations ourselves, we knew that researchers and students needed a better way to learn and build robots… So we spun out a company and we set out to solve this problem. There were a few other ideas on the table, but research and education seemed like the perfect starting point for us – it just fit.

We knew that our market needed a powerful low-cost robot. Our first attempts resulted in a great robots that customers loved, but at $5000, they were too expensive for most schools. We refined our designs and got our price down to $3500. Better, but not still not good enough and it was really hard for us to get the price down further.

To keep our costs low, we experimented heavily with open source. In 2010, we began working closely with a really innovative open source robotics company in Menlo Park, Willow Garage. It was started in 2006 by Scott Hassan one of Google's first engineers. They have developed the world's best operating system for robots and it is open source (Think of it as the Linux of the robotics world). We partnered with them to launch Turtlebot in the summer of 2011. The Turtlebot is the world's most affordable professional robotics development tool.

What were some of the main tipping points (if any) or a-ha moments?

How did the tipping points happen?

The biggest tipping point for Turtlebot was making the decision to sell it online. This allowed us to really cut down our customer acquisition cost and we pass these savings on directly to our customers.

What were your biggest mistakes, or biggest wastes of time/money?

We make lots of mistakes. It is very important to us that we make mistakes. It keeps us innovative, it keeps us competitive. One of our most important mantras is "Fail Fast, Fail Cheap, Fail Often". One of our investors taught us this early on and we live by it. The single biggest "lesson learned" so far is the importance of "slow to hire, quick to fire".

Key manufacturing and marketing lessons learned?

Instead of spending a ton on traditional marketing, we invest those dollars into proactive customer service and back into development of rock-solid products. It's all about turning customers into evangelists by delivering a remarkable customer experience. Tons of companies have figured this model out (i.e. Zappos), but it's pretty rare in our industry. It's working – our best marketing by far is word-of-mouth.

Manufacturing is so important for us. We spend a lot of time iterating our designs and working with our suppliers to optimize manufacturing process, product reliability and inventory management. I think it is important to have as small a list of trusted and proven suppliers as possible. The bigger the list becomes the more potential sources of error.

If you were to do it all over again, what would you do differently?

I don't think we've done anything regrettable. Sure, we've made mistakes – everyone does. We learn from them and become better because of them. Our business is stronger today because of them. It all goes back to our "Fail Fast, Fail Cheap, Fail Often" mantra.

What's next?

We see the Turtlebot as the very first "personal computers" of the robotics industry. The Turtlebot is the Apple II of the personal robotics industry. We want to make Turtlebot accessible and attractive to a much larger audience. Much like the first PCs, the Turtlebot is only really usable by programmers, hackers and the tech-savvy hobbyist communities. The next big thing for Turtlebot is figure out how to make it easier to use for non-programmers and also to make it even more affordable. Another big tipping point will be the creation of a "killer app" – an application to make Turtlebot highly valuable to the masses. In the mid-1980s, Lotus 123 was the "killer app" that contributed significantly to the success of the PC in the business world. Turtlebot needs its Lotus 123 equivalent. The open source community is working on ths as we speak and we're working on a few "killer apps" of our own. We're laying the foundation. Now it's only a matter of time until something big happens.

For more info about the contest and winners, visit the Shopify Blog

The dunes that inspired Dune: Agate beach sand dunes. (Photo: Kevin McNeal)

For a mere 20 years or so, I refused to read fiction. Read something that someone just made up? I can do that myself, thanks.

That was the attitude at least.

My time of reckoning came when I needed to fix insomnia, and non-fiction business books before bed just compounded the problem. I began reading fiction to "turn off" and instead saw breakthroughs in creativity and quality of life as a side-effect.

Now, if people ask me, for instance, "Which books should I read on leadership?", I might reply: "Dune and Ender's Game." I've come to look for practical solutions in both fiction and non-fiction.

For those of you who are stuck in the business or how-to sections, as I was for decades, I offer you 10 fiction books that might change how you view the world… and how you perform.

The Top 10

Listed in no particular order…

1. Zorba the Greek

I have recommended this outstanding book before. It pits the instinctive against the intellectual, the simpleton (brilliant at times) against the over-thinker. Finding myself with my head frequently stuck up my own ass, this book is a constant companion and reminder to step outside of my brain.

Zorba himself would have you believe that words are wasteful and books a frivolous use of time (better spent dancing barefoot on the beach), but Zorba the Greek is stuffed like a grape leaf full of life-altering wisdom. For those looking to release the inner wild man, live each day in passionate awe, and reconnect with nature, Zorba reminds us how to live fully, love lasciviously and appreciate a life in the present tense.

2. Musashi

I bought this book at Kinokuniya bookstore in Shinjuku, Tokyo. It is as thick as a Harry Potter book, probably thicker, but the pages are as thin as onion skin. It's a serious tome. I never expected to finish it, and I tore through it in less than two weeks.

If you're like me and enjoy a good Samurai story – the wandering ronin, epic battle scenes with lots of penetrating (wisdom), then you'll love Eiji Yoshikawa's Musashi. It's sold more than 100 million copies in Japanese. Musashi's transformation from talented yet conflicted young warrior to one of the greatest (perhaps the greatest) swordsman of all time teaches you about critical thinking, strategizing, and ultimately, that there is more to life than merely surviving. Musashi re-created himself from nothing and rose from destitution to legend.

Why not you?

3. Stranger in a Strange Land

Ever feel like you don't quite fit in? Don't want to follow society's silly rules?

Then you can probably relate to human-born and Martian-raised Valentine Michael Smith. In this controversial 1960's cult classic, Heinlein questions long held assumptions on religion, government, and sexuality (free Martian love for all!).

It's also where the term "grok" originated.

4. Ender's Game

At one point, this was the only book listed on Mark Zuckerberg's Facebook page. If it's good enough to be the sole selection of the founder of Facebook, maybe there's something to it.

The plot: In anticipation of another attack from a hostile alien race, the search for a brilliant military strategist has led to Ender Wiggin.

In space combat school, Ender stands out, demonstrating exceptional leadership and unconventional strategy. But it is lonely at the top for Ender, as he struggles with relentless pressure from his instructors. Through Ender's journey, you'll learn how to capitalize on your strengths and those of your teammates, as well as exploit your adversaries' weaknesses. Ender is a futuristic Level 5 Leader we can all learn from.

Teaser: Drop kicks in zero gravity are the bomb. Trust me.

5. Dune

To check the power of a fast-rising duke, a space emperor executes a convoluted plan to gain control of the all-important planet that has a monopoly of The Spice (a super drug-cum-jet fuel). But wait! The duke's son is actually the messianic result of a breeding program run by space witches. Oh, and the Mentats? The coolest. If that all sounds like gibberish, don't despair. Dune presents, despite my synopsis, perhaps the most incredibly detailed and oddly believable fictional landscape I've ever encountered.

Also, to add to any confusion: walk without rhythm, and you won't attract the worm.

Completely unnecessary YouTube reference — Christopher Walken has rhythm:

6. High Fidelity

After his girlfriend leaves him for another man, Rob embarks on a journey of self-discovery and evaluation by contacting ex-girlfriends to see what went wrong in each relationship. High Fidelity teaches us that eventually we all have to grow up, get past adolescent self-importance, and take responsibility for our own lives.

Who says I only like books with killing, aliens, and Greeks? I'm a sensitive guy .

7. The Brief Wondrous Life of Oscar Wao

Raised in a culture where men are powerful, sexual, and dominant, the Klingon-speaking, D&D-playing chubby boy thinks he'll never find true love or physical affection. Oscar struggles as a young immigrant from the Dominican Republic living with his older sister and mother in Paterson, New Jersey. A fun read with lots of geek culture, great history, and oh, it also won the Pulitzer Prize.

May the half-elves inherit the earth. Grey or Drow? Tough choice.

8. Fahrenheit 451

This classic work on state censorship remains as relevant in today's world of digital delights as it was when published in the black-and-white world of 1953.

In a futuristic American city, firefighter Guy Montag does not put out blazes; instead, he extinguishes knowledge and promotes ignorance by conducting state decreed book burnings. After an elderly woman chooses a fiery death with her books rather than a life without the written word, he begins questioning not only his profession, but also a society that allows itself to be lulled into complacency by constant exposure to state-controlled, mind-numbing television shows.

If you wonder why some people take censorship so seriously, this book will give you the answer. It's also a fantastically inspiring story of a one-versus-a-million fight that's worth fighting. Who knows when your turn will come?

9. A Hitchhikers Guide to the Galaxy

If Fear and Loathing in Las Vegas and Star Wars had a love-child, it would read something like this.

This colorful novel by Douglas Adams begins with Arthur Dent narrowly escaping the Earth's destruction as it is bulldozed to make room for a hyperspace bypass. Beyond the bizarre characters and plot twists, Adams proves that despite how bleak ones situation might be, there's always something to laugh about. Adam's Total Perspective Vortex is also considered to be a great Zen teaching tool, so if you're looking for the meaning of life, you might not be far from the answer here.

If you need humor to make the jump to fiction, this might be your gateway drug.

10. Motherless Brooklyn

My mother and brother are, thankfully, book snobs. I mean this in the best way possible. Books take a lot of time, after all, and life is short. So when both my mom and broha simultaneously insisted that I read this book, I had to investigate.

A thriller about a detective with Tourette Syndrome? Sign me up. It's a hysterical romp through high-stakes problem-solving and old-fashioned crime fighting, all told through deliciously mind-tickling prose. One of my absolute favorites.

Zen school and cop tapping? Check and check.

###

Which one fiction book would you choose to convert a non-fiction devotee to the world of imagination?

Peter Diamandis explaining X PRIZE economics. (Photo: Hubert Burda)

Dr. Peter H. Diamandis is the Chairman and CEO of the X PRIZE Foundation, and co-Founder and Chairman of the Singularity University, a Silicon Valley based institution partnered with NASA, Google, Autodesk and Nokia. Dr. Diamandis attended MIT, where he received his degrees in molecular genetics and aerospace engineering, as well as Harvard Medical School where he received his M.D.

He's no underachiever.

I've known Peter for several years, both as a friend and as advising faculty at Singularity University. He is known for being incredibly resourceful. And, true as this may be, it's his ability to teach resourcefulness that impresses me most…

The following guest post offers an optimistic look at the tools and technologies he believes will change this world for the better, which you can harness. If you like this small sample and the resources at the end, I highly encourage you take a look at his new book on this subject, Abundance.

In it, Diamandis and co-author Kotler challenge us all to solve humanity's grand challenges. The timing is right; innovative small teams are now able to accomplish what only governments and large corporations could once fathom.

I hope this excites you as much as it excites me. With a little planning and a little technology, you–yes, you–can create a domino effect that changes the world.

Enter Peter

In 1861 William Russell, one of the biggest investors in the Pony Express, decided to use the previous year's presidential election for promotional purposes.

His goal was to deliver Abraham Lincoln's inaugural address from the eastern end of the telegraph line, located in Fort Kearny, Nebraska, to the western end of the telegraph line, in Fort Churchill, Nevada, as fast as possible. To pull this off, he spent a small fortune, hired hundreds of extra men, and positioned fresh relay horses every ten miles. As a result, California read Lincoln's words a blistering seventeen days and seven hours after he spoke them.

By comparison, in 2008 the entire country learned that Barack Obama had become the forty-fourth president of the United States the instant he was declared the winner. When Obama gave his inaugural address, his words traveled from Washington, DC, to Sacramento, California, 14,939,040 seconds faster than Lincoln's speech. But his words also hit Ulan Bator, Mongolia, and Karachi, Pakistan, less than a second later. In fact, barring some combination of precognition and global telepathy, this is just about the very fastest such information could possibly travel.

Such rapid progress becomes even more impressive when you consider that our species has been sending messages to one another for 150,000 years. While smoke signals were innovative, and air mail even more so, in the last century, we've gotten so good at this game that no matter the distances involved, and with little more than a smart phone and a Twitter account, anyone's words can reach everyone's screen in an instant. This can happen without additional expenses, extra employees, or a moment of pre- planning. It can happen whenever we please and why-ever we please. With an upgrade to a webcam and a laptop, it can happen live and in color. Heck, with the right equipment, it can even happen in 3-D.

This is yet another example of the self-amplifying, positive feedback loop that has been the hallmark of life for billions of years. From the mitochondria-enabled eukaryote to the mobile-phone-enabled Masai warrior, improved technology enables increasing specialization that leads to more opportunities for cooperation. It's a self-amplifying mechanism. In the same way that Moore's law is the result of faster computers being used to design the next generation of faster computers, the tools of cooperation always beget the next generation of tools of cooperation. Obama's speech went instantly global because, during the twentieth century, this same positive feedback loop reached an apex of sorts, producing the two most powerful cooperative tools the world has ever seen.

The first of these tools was the transportation revolution that brought us from beasts of burden to planes, trains, and automobiles in less than two hundred years. In that time, we built highways and skyways and, to borrow Thomas Friedman's phrase, "flattened the world." When famine struck the Sudan, Americans didn't hear about it years later. They got real-time reports and immediately decided to lend a hand. And because that hand could be lent via a C-130 Hercules transport plane rather than a guy on a horse, a whole lot of people went a lot less hungry in a hurry.

If you want to measure the change in cooperative capabilities illustrated here, you can start with the 18,800-fold increase in horsepower between a horse and a Hercules. Total carrying capacity over time is perhaps a better metric, and there the gains are larger. A horse can lug two hundred pounds more than thirty miles in a day, but a C-130 carries forty-two thousand pounds over eight thousand miles during those same twenty-four hours. This makes for a 56,000-fold improvement in our ability to cooperate with one another.

The second cooperative tool is the information and communication technology (ICT) revolution we've already documented. This has produced even larger gains during this same two-hundred-year period.

ICT's impact doesn't end with novel ways to spread information or share material resources. As Rob McEwen discovered when he went looking for gold in the hills of northwestern Ontario, the tools of cooperation can also create new possibilities for sharing mental resources—and this may be a far more significant boost for abundance.

Gold in Dem Hills

A dapper Canadian in his mid-fifties, Rob McEwen bought the disparate collection of gold mining companies known as Goldcorp in 1989. A decade later, he'd unified those companies and was ready for expansion—a process he wanted to start by building a new refinery. To determine exactly what size refinery to build, McEwen took the logical step of asking his geologists and engineers how much gold was hidden in his mine. No one knew. He was employing the very best people he could hire, yet none of them could answer his question.

About the same time, while attending an executive program at MIT's Sloan School of Management, McEwen heard about Linux. This open- source computer operating system got its start in 1991, when Linus Torvalds, then a twenty-one-year-old student at the University of Helsinki, Finland, posted a short message on Usenet:

I'm doing a (free) operating system (just a hobby, won't be big and professional like gnu) for 386(486) AT clones. This has been brewing since April, and is starting to get ready. I'd like any feedback on things people like/ dislike in minix…

So many people responded to his post that the first version of that operating system was completed in just three years. Linux 1.0 was made publicly available in March 1994, but this wasn't the end of the project. Afterward, support kept pouring in. And pouring in. In 2006 a study funded by the European Union put the redevelopment cost of Linux version 2.6.8 at $1.14 billion. By 2008, the revenue of all servers, desktops, and software packages running on Linux was $35.7 billion.

McEwen was astounded by all this. Linux has over ten thousand lines of code. He couldn't believe that hundreds of programmers could collaborate on a system so complex. He couldn't believe that most would do it for free. He returned to Goldcorp's offices with a wild idea: rather than ask his own engineers to estimate the amount of gold he had underground, he would take his company's most prized asset—the geological data normally locked in the safe—and make it freely available to the public. He also decided to incentivize the effort, trying to see if he could get Torvald's results in a com- pressed time period. In March 2000 McEwen announced the Goldcorp Challenge: "Show me where I can find the next six million ounces of gold, and I will pay you five hundred thousand dollars."

Over the next few months, Goldcorp received over 1,400 requests for its 400 megabytes of geological data. Ultimately, 125 teams entered the competition. A year later, it was over. Three teams were declared winners. Two were from New Zealand, one was from Russia. None had ever visited McEwen's mine. Yet so good had the tools of cooperation become and so ripe was our willingness to use them that by 2001, the gold pinpointed by these teams (at a cost of $500,000) was worth billions of dollars on the open market.

When McEwen couldn't determine the amount of ore he had under- ground, he was suffering from "knowledge scarcity." This is not an uncommon problem in our modern world. Yet the tools of cooperation have become so powerful that once properly incentivized, it's possible to bring the brightest minds to bear on the hardest problems. This is critical, as Sun Microsystems cofounder Bill Joy famously pointed out: "No matter who you are, most of the smartest people work for someone else."

Our new cooperative capabilities have given individuals the ability to understand and affect global issues as never before, changing both their sphere of caring and their sphere of influence by orders of magnitude. We can now work all day with our hands in California, yet spend our evenings lending our brains to Mongolia. NYU professor of communication Clay Shirky uses the term "cognitive surplus" to describe this process. He defines it as "the ability of the world's population to volunteer and to contribute and collaborate on large, sometimes global, projects."

"Wikipedia took one hundred million hours of volunteer time to create," says Shirky. "How do we measure this relative to other uses of time? Well, TV watching, which is the largest use of time, takes two hundred billion hours every year—in the US alone. To put this in perspective, we spend a Wikipedia worth of time every weekend in the US watching advertisements alone. If we were to forgo our television addiction for just one year, the world would have over a trillion hours of cognitive surplus to commit to share projects." Imagine what we could do for the world's grand challenges with a trillion hours of focused attention.

An Affordable Android

Until now, we've kept our examination of the tools of cooperation rooted in the past, but what's already been is no match for what's soon to arrive. It can be argued that because of the nonzero nature of information, the healthiest global economy is built upon the exchange of information. But this becomes possible only when our best information-sharing devices— specifically devices that are portable, affordable, and hooked up to the Internet—become globally available.

That problem has now been solved.

In early 2011, the Chinese firm Huawei unveiled an affordable $80 Android smart phone through Kenya's telecom titan Safaricom. In less than six months, sales skyrocketed past 350,000 handsets, an impressive figure for a country where 60 percent of the population lives on less than $2 a day. Even better than the price are the 300,000-plus apps these users can now access. And if that's not dramatic enough, in the fall of 2011 the Indian government partnered with the Canada-based company Datawind and announced a seven-inch Android tablet with a base cost of $35.

But here's the bigger kicker. Because information-spreading technology has traditionally been expensive, the ideas that have been quickest to spread have usually emerged from the wealthier, dominant powers—those nations with access to the latest and greatest technology. Yet because of the cost reductions associated with exponential price-performance curves, those rules are changing rapidly. Think about how this shift has impacted Hollywood. For most of the twentieth century, Tinseltown was the nexus of the entertainment world: the best films, the brightest stars, an entertainment hegemony unrivalled in history. But in less than twenty-five years, digital technology has rearranged these facts.

On average, Hollywood produces five hundred films per year and reaches a worldwide audience of 2.6 billion. If the average length of those films is two hours, then Hollywood produces one thousand hours of content per year. YouTube users, on the other hand, upload forty-eight hours' worth of videos every minute. This means, every twenty-one minutes, YouTube provides more novel entertainment than Hollywood does in twelve months. And the YouTube audience? In 2009 it received 129 million views a day, so in twenty-one days, the site reached more people than Hollywood does in a year. Since content creators in the developing world now outnumber content creators in the developed world, it's safe to say that the tools of cooperation have enabled the world's real silent majority to finally find its voice.

And that voice is being heard like never before. "The global deployment of ICT has utterly democratized the tools of cooperation," says Salim Ismail, SU's founding executive director and now its global ambassador. "We saw this in sharp relief during the Arab Spring. The aggregated self- publishing capabilities of the everyman enabled radical transparency and transformed the political landscape. As more and more people learn how to use these tools, they'll quickly start applying them to all sorts of grand challenges."

Resources and Next Steps

This is where you come in.

All of these cooperative tools and exponential technologies are reshaping our globe. But you no longer have to sit on the sidelines and wait for the future to happen. You are now empowered to get involved. To change the world. If you're sick of the doom and gloom and ready to get in the game, explore the resources below. If you feel inspired to delve deeper, the Abundance book offers many more options.

Today's 10 best crowdsourcing and collaboration tools on the web:

So given these powerful tools of collaboration, how do you use them to solve your corporate challenges? Here's a few of the cutting edge organizations that have been created to help you.

1. X PRIZE Foundation (www.xprize.org): The X PRIZE focuses on designing and running incentive competitions in the $1M – $30M arena focused on solving grand challenges.

2. CoFundos (cofundos.org): cheap and really good platform for the development of open-source software.

3. Genius Rocket (geniusrocket.com): solid crowdsourced creative design agency composed solely of vetted video production professionals producing content as a fraction of the cost of a traditional ad agency.

4. Amazon Mechanical Turk (mturk.com): popular and powerful crowdsourcing platform for simple tasks that computers cannot perform(yet), such as podcasts transcribing or text editing. There are also companies, like CrowdFlower, that leverage Mechanical Turk (and similar tools) for even more elegant solutions.

5. Innocentive (www.innocentive.com): one of today's best online platform for open innovation, crowdsourcing and innovation contests. This is where organizations access the world's brightest problem solvers.

6. UTest (http://www.utest.com): the world's largest marketplace for software testing services.

7. IdeaConnection (www.ideaconnection.com): open innovation challenge site for new inventions, innovations and products.

8. NineSigma (www.ninesigma.com): open innovation service provider, connecting clients with a global innovation network of experts.

9. Ennovent (www.ennovent.com): worldwide expert platform seeking solutions for sustainable development in energy, food, water, health and education in rural India.

10. TopCoder (www.topcoder.com): the world's largest competitive software development & creative design community, with over 200,000 at your fingertips.

Today's best crowd-funding tools on the web:

In addition to getting people to help solve your problems, what about getting people to help fund your work? Here's a few of the key sites that can help you raise money:

1. CrowdRise (www.crowdrise.com): Crowdrise is an innovative, crowd-sourced community of volunteers and online fundraisers that have come together to support online fundraising for charity, events and special projects. It's a way to raise money in new ways, turning participants and supporters into effective online fundraisers.

2. Kickstarter (www.Kickstarter.com): Kickstarter is the world's largest funding platform for creative projects. In 2011 the platform raised over $100 million for projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields. Uniquely, on Kickstarter, a project must reach its funding goal before time runs out or no money changes hands, it's an "all or nothing model".

3. IndieGoGo (www.indiegogo.com): IndieGoGo you can create a funding campaign to raise money quickly and securely. This trusted platform has helped to raise millions of dollars for over 65,000 campaigns, across 211 countries.

Paulo Coelho (Photo: Philip Volsem)

Paulo Coelho has long been one of my writing inspirations.

His work, of near universal appeal, spans from The Alchemist to the most recent Aleph and has been translated into more than 70 languages.

Few people know that The Alchemist, which has sold more than 65 million copies worldwide, was originally published by a small Brazilian publisher to the tune of… 900 copies. They declined to reprint it. It wasn't until after his subsequent novel (Brida) that The Alchemist was revived and took off.

I, for one, have always been impressed with consistent writers. Paulo, who averages one book every two years, is staggeringly consistent. As I type this, I am under the pressure of book deadlines and often feel as Kurt Vonnegut did: "When I write, I feel like an armless, legless man with a crayon in his mouth."

My output is erratic at best, and I wondered: how does Paulo write? What is his process? How does he think about it?

I reached out to him, and he was kind enough to reply with the attached/linked audio. In it, he provides some gems and answers the following questions, which I posed to him (I provide my own abbreviated answers in brackets):

- When on deadline, what is the first thing you do in the morning? What does your daily schedule look like? Do you take any days off, and what determines if you've had a "successful" writing day?



[TIM: 2-3 hours of fasted writing in the morning to Mozart and pu-ehr tea. Success is two shitty pages of drafts.]

- How do you capture ideas that might be helpful in your writing? These days, what software and tools do you use for writing?

[TIM: Evernote, Moleskine notebooks]

- How much of your books do you visualize/outline upfront vs. writing organically piece-by-piece? In other words, how much of the story arc have you decided before you start writing? Let's take two books as examples — The Alchemist and Aleph. Otherwise, how did your process differ for these two books?



[TIM: Though it changes as I write, I outline everything before starting. I suspect organic writing is more common in fiction.]

- What are the most common mistakes that you see first-time novelists making? Most common weaknesses?



[TIM: NA]

- Do you base your characters on real people? Why or why not? If not, how do you develop those characters?



[TIM: NA]

- What are the 2-3 things you personally find most invigorating or helpful when you're stuck or feel stagnated with writing/ideas? Do you have a team of any type (researchers, etc.) who help you?



[TIM: Rereading Bird by Bird when I doubt/loathe/chastise myself, deadlifting, and doing sprint workouts.]

Tim Ferriss – Paulo Coelho by Tim Ferriss

Paulo offered a few additional notes and resources further exploration:

As for the sentence in Alice in Wonderland: "Begin at the beginning," the King said gravely, "and go on till you come to the end: then stop."

Three podcasts on his writing process:

1) On writing I http://youtu.be/vKBOKLF3Ul8

2) On writing II – the puzzle http://youtu.be/3_TJ4MIGeg8

3) Inspiration http://youtu.be/VWRmbSgS2Yw

For more musings, see Paulo's Facebook fan page, with almost 8,000,000 fans (!)

###

If you write, what have you found most helpful for the first and last questions? Here they are, and I'd love your thoughts in the comments:

- When on deadline, what is the first thing you do in the morning? What does your daily schedule look like? Do you take any days off, and what determines if you've had a "successful" writing day?

- What are the 2-3 things you personally find most invigorating or helpful when you're stuck or feel stagnated with writing/ideas? Do you have a team of any type (researchers, etc.) who help you?

###

Odds and Ends: Shorty Awards

A few readers have kindly nominated me to win the "blogger" category for The Shorty Awards. I figure, if I'm in the game, I might as well try and win it! If you like this blog (300+ posts since 2007), please consider taking a second to . Thank you!

Hanoi toddler and b-boy, from a trip Ma.tt and I took in 2009. (Photo: Matt Mullenweg)

The next post will be an interview on writing process with the inimitable Paulo Coelho, author of The Alchemist and Aleph, among many others. His work been translated into 71 languages.

In the meantime, I'd like make a few offers and provide a few updates, as well as a few reading links:

1) Would you like to be in The 4-Hour Chef? I'd love for you to be.

Amazingly, it hit both #1 and #2 (for Kindle version) in cookbooks on Amazon when it was announced, and I think it could be bigger than the last two books. If you've had success on The Slow-Carb Diet™, have any before/after pics, and would like to be featured in the book, please click here!

2) Random articles from around the web that readers of this blog might enjoy (or find amusing):

- IBM Worker Email-Free for 4 Years: How to Live without Email

- Interview on travel for the BBC – Tim Ferriss: Forms of Identification

- SF Chronicle interview – Tim Ferriss has strong likes: knives, kettlebells

- Volkswagen turns off Blackberry email after work hours

3) The winner of the free roundtrip anywhere in the world, a prize from the Christmas Countdown experiment (intermittent fasting, plus training), is Daniel Kislyuk! There were some fantastic self-trackers, but Daniel gave constant status updates and then wrapped up with a summary post. Daniel, please keep an eye on your e-mail for a note from Amy.

4) For the trip to SF for all-day training with Chip Conley, I'll let Chip deliver the message himself:

Surprise + Joy = Elation. That's my new Emotional Equation of the day. Wow, I'm elated by the response to my guest blog and how many insightful entries were submitted. Thank you so much for diving into the deep end of the emotional swimming hole with me. It seems like this book is made for these times. The more externally chaotic the world, the more we yearn for some kind of internal logic.

There were 7 entries (of the first 100 submitted, although I did read every single one of the almost 500) that deserved extra recognition. I will give an Honorable Mention to Divya (1/19 at 7:03 am), Eric Sigfried (1/19 at 8:52 am), Marcus (1/19 at 9:18 am), Susan Dupre (1/19 at 10:19 am) and Ryan (1/19 at 10:50 am).

We have a runner-up whose dissection and use of the Anxiety Balance Sheet impressed me, and that's Ryan Riegner (1/19 at 9:22 am). Ryan, I believe you live in the NYC area and I'll be there from Feb 19-25 for a book launch party and media tour. I would like to invite you out to a meal with me while I'm in town. This wasn't planned to be an extra prize, but your response deserves it. And, our winner is Diego Velasquez (1/19 at 7:54 am) who will be flying out to SF to stay at our luxurious Hotel Vitale for a couple of nights and spend a day learning what it means to be a Chief Emotions Officer. For those who'd like to continue to learn more about Emotional Equations, check out our DIY contest on the Emotional Equations Facebook page, as it gives you another shot at a trip to SF and dinner with me.

Thanks once again for the phenomenal efforts and I hope you enjoy the book if you read it!

Chip Conley, founder of Joie de Vivre Hotels

Chip Conley is the founder of Joie de Vivre Hospitality, which he began at age 26 and built to more than 30 properties in California alone. In 2010, Joie de Vivre was awarded the #1 customer service award in the U.S. by Market Metrix (Upper Upscale hotel category).

Conley has also been named the "Most Innovative CEO" in the Bay Area by the San Francisco Business Times, and I'm proud to call him a friend.

We've shared many glasses of wine together. He doesn't know what I'm about to tell you, but it's true (Hi, Chip!). When we first met, and after reading his first book on Maslow's hierarchy of needs, I wondered "Is this Chip dude for real? Implementing self-actualization in a company?!?" My curiosity drove me to visit a few of his hotels, including Hotel Vitale, where I eventually concluded: these are the happiest employees I've ever met.

He has figured out what makes people tick.

The following post is a guest post by Chip and based on his new book, Emotional Equations. Be sure to read to the end, as there is a chance to win an expense-paid trip to SF to spend an entire day training with him.

Deal-making? Empire building? Self-fulfillment? He's your guy.

Enjoy…

Enter Chip Conley

I graduated from Stanford Business School at age 23 with Seth Godin.

I remember talking with him and others about my aspirations as an entrepreneur and my desire to become a CEO some day. Back then, I thought in order to become a successful CEO, I would need to become superhuman, leaping tall buildings in a single bound. But, after 24 years of being a CEO (I founded Joie de Vivre Hospitality, what's become the 2nd largest boutique hotelier in the world, and sold a majority interest to a billionaire in 2010), I've come to realize that the best business leaders aren't superhuman, they're simply super humans as they've learned how to become Chief Emotions Officers.

Chief Emotional Officer?

Leaders are the "emotional thermostats" of the groups they lead. If you want to dig into the support for this, read this compelling piece by Daniel Goleman, the man who popularized the idea of "emotional intelligence" in the 90s and proved that 2/3 of the effectiveness of business leaders comes from their EQ rather than their IQ or level of work experience.

There are multiple metaphors I use to describe how emotions work in our lives. One that feels very familiar to me is baggage. Our luggage in life is an apt metaphor for me – a guy who's been a hotelier for a quarter century. Countless times I've seen people show up at our hotel front desks with all kinds of baggage, and only some of it the physical kind. Most of us have emotional baggage that may seem invisible to the untrained eye or invisible to the person carrying the baggage. But the results of lugging that baggage around for years is noticeable in how that person shows up at the metaphorical front desk of life. If you are a Chief Emotions Officer, you are more aware of all the bags you're carrying and how to open your luggage up and make sense of what's inside.

Opening up a bag, you may find a truly messy interior with things in complete disarray. But, these emotional equations create a certain logic to how you pack and unpack your bags and, in fact, being a little more conscious of what's in your bag may allow you to discard a few heavy items that have been weighing you down. Creating your own internal logic regarding your emotional baggage will allow you to carry a lighter bag…one that's eminently easier to unpack.

4 Emotions to Unpack

We're going to focus on four emotions that you can start unpacking (i.e. mastering).

Think of emotions as existing on a color wheel. Isaac Newton created the color wheel long ago and helped us understand that red plus blue equals purple, for instance. I learned in my research for Emotional Equations – which allowed me to spend a couple of years with some of the world's psychology luminaries – that there's an emotional wheel with primary and secondary emotions: the Plutchik wheel. In my book, I evolve this wheel further so you can imagine that Disappointment + a Sense of Responsibility = Regret. And, once you understand the emotional building blocks of Regret, you can turn it from a downer into a lesson. Regret teaches. Fear protects. Sadness releases. Joy uplifts. Empathy unites. Think of your emotions as messages that give you the freedom, rather than the obligation, to respond. One of my favorite quotes of all time comes from Viktor Frankl, author of Man's Search for Meaning:

"Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom."

Now, let's unpack and master the emotions of Despair, Happiness, Anxiety, and Curiosity.

DESPAIR = SUFFERING – MEANING

I am very proud of this equation.

It's the one that started my exploration of emotions through the lens of equations. I took Viktor Frankl's book and distilled it down to this useful mantra at a time in my life in 2008, when I had a series of friends commit suicide, had a flatline experience myself while giving a speech in St. Louis (literally: my heart stopped, and I dropped), and the rest of my life felt in disarray. If you consider the words "despair" and "meaning" to be abstract or off-putting, consider "sadness" as a tamer version of despair or "learning" as a more concrete version of meaning.

First off, in order for the math to work, "suffering" has to be a constant. This is the first Noble Truth of Buddhism, but it's also true, and not just in a recession. You can always find the suffering if you want to look for it. I had no idea when I started writing this book that this decade would come to resemble the 1930s in that our near Depression-like economic conditions would persist as long as they have. But while the Depression was a very difficult time for so many people, interview-based research studies show that it indirectly prepared young women for losing their husbands later in life. These women learned self-reliance, independence, and courage early in life, which served them (and perhaps saved their families) when their husbands passed.

So, consider "meaning" in the following way: many of us go to the gym to exercise our physical muscles to ensure that our physical body doesn't bloat or atrophy. If you're going through a difficult time right now, maybe – unwittingly – you've signed up for emotional boot camp and you're being asked to exercise emotional muscles that haven't had this kind of workout for years. But, this isn't meant to be just agony. It's meant to prepare you for later in life. The emotions you may be mastering today – humility, resilience, persistence, a sense of humor – will serve you well at some later point in your life, maybe in the not too distant future.

For me, having my long-term relationship end in the midst of my train wreck of a life in 2009 was the last thing I was looking for. Suffering felt ever-present, like the fog during a San Francisco summer. The foghorn that cut through this opaque time was the question I asked myself on my most sad, self-pitying days, "How is this experience going to serve me in my next relationship? How is this going to make me a better partner when I find my true soul mate?"

These weren't easy questions to ask when I felt radioactive and couldn't imagine anyone loving me again. But I kept the exercise metaphor in mind. The fact that I could joke with friends about my emotional boot camp helped me realize that great rewards – or meaning – could arise as a result of this painful experience. So, just know that there are fruits to gather in the valley of Despair.

HAPPINESS = WANTING WHAT YOU HAVE / HAVING WHAT YOU WANT

People often have a love-hate relationship with this equation. The proper definitions of the numerator and denominator are what create the magic. "Wanting what you have" can be translated into "practicing gratitude," having a reverence for what is working in your life. The more tricky definition is in the bottom of this equation. To "have what you want" is an act of "pursuing gratification." I want something and it's my job to go out and pursue it or "have" it in order to satisfy that want.

Don't get me wrong. The act of pursuing something can bring us a sense of accomplishment and take us into that focused "flow" state. But, the risk is that "chasing something with hostility" (some dictionaries' definition of "pursuit") or even with just focused attention can completely distract you from what's in the numerator, what you already have. Socrates said it best, "He who is not contented with what he has would not be contented with what he would like to have."

As a type-A guy who's spent more than my share of time on the hedonic treadmill, I can tell you that it's very difficult to simultaneously practice gratitude while also pursuing gratification. Some mystics are able to take the bottom of this equation down to zero, which may give them infinite happiness. But, for the rest of us mere mortals, the risk is not in lack of pursuit, as this is part of what modern society demands of us. The risk is that we completely diminish the power of gratitude.

So, the true power of this equation is in keeping your attention on the numerator.

Someone once said to me that feeling gratitude without sharing it with someone is like wrapping a present without giving it to the intended recipient. So, what are the ways you can show your gratitude in such a fashion that it becomes a habit or practice for you that's ingrained in your everyday life? For me, I needed to start by having it on my conscious "to-do" list each day. I had a rule that I had to give two face-to-face expressions of gratitude each day at work, preferably to someone who found the thank you unexpected. In fact, I wrote about this in the Huffington Post after one of my recent trips to Bali. What if you thought of your expressions of gratitude like a devotional daily offering?

Let me give you a suggestion about a Gratitude Journal as well. They're not for everyone, just like personal journals resonate with some while repelling others. The purpose of a Gratitude Journal is to help you be conscious about "wanting what you have." An alternative means of accomplishing this purpose is to have a Gratitude Buddy. Make it a point to meet with your Buddy once a month (or more frequently if you wish) in a location where there are no distractions and ask each other, "What gifts do you have in your life that are easy to take for granted?" and "What was a recent gift that may have been wrapped up as a pain or punishment?"

For those of you who'd like to explore this equation a little further, I have two suggestions.

1. Check out a research article by Jeff T. Larsen and Amie R. McKibban where they literally put this equation to the test (with inconclusive results, but really interesting findings).

2. Watch my 2010 TED talk, in which I share my key learning from my trip to Bhutan to study their Gross National Happiness Index.

ANXIETY = UNCERTAINTY x POWERLESSNESS

After reading more than a dozen books and 50 research studies on anxiety, I was struck by the fact that 95% of the causes of anxiety seemed to be distilled down to what we don't know and what we can't control. You may have heard of the study that demonstrated most people would prefer receiving an electric shock now that's twice as painful as receiving some random shock in the next 24 hours. This is why, as leaders, we need to recognize that hiding the truth, especially when it's going to come out at some point in the near future, is a futile mistake that can often just increase the amount of anxiety your employees are feeling.

If we know that the combustible product of uncertainty and powerlessness creates anxiety, we can create what I call an Anxiety Balance Sheet to turn this around. Take out a piece of paper and create four columns. Then, think of something that is currently making you anxious. Regarding that subject, the first column is "What Do I Know" about this issue. The second column is "What Don't I Know." The third column is "What Can I Influence." The fourth column is "What Can't I Influence." Spend enough time doing this so that you have at least one item per column but you may find that you have a half-dozen items in some columns.

After you feel complete, what do you notice with respect to the four columns? About 80% of the people I've worked this through with are surprised that they have more items listed in columns one and three (the "good" columns) than they do in columns two and four. The reality is that when something is making us anxious, we tend to fixate on those elements of the problem that feel mysterious (what we don't know) or uncontrollable (what we can't influence). So, there's some liberation in just outlining what's making you crazy and realizing that there may be many balancing positives to those issues that are vexing you.

Now, spend some time reviewing the items in column two (what you don't know). Is there someone you can ask – your boss, your boyfriend, your doctor – who can help you with some needed information that will move this item from column two to column one? Maybe it's just doing a Google search? I know it's scary to ask your boss whether your job is in jeopardy, but remember the electric shock example I mentioned earlier. Anxiety can be more painful and debilitating than bad news. Now look at column four and truly ask yourself, "Are you completely powerless about the items on this list?" I've found that having a smart friend sit with me can sometimes help me uncover ways to move items from column four to column three.

In sum, just the act of unpacking your anxiety bag and knowing what's inside can have a profound effect on reducing your fear of the future.

CURIOSITY = WONDER + AWE

We've had a subtraction, a division, and a multiplication equation so far. Now, we'll finish with an addition equation around the experience of curiosity. Recent studies have shown that curiosity is one of the most valuable emotional qualities people can leverage during periods of crisis. Fear and most negative emotions train us to narrow our scope. "Fight or flight" reactions are evolution's means of helping us avert danger. But, oftentimes, we need to move from narrowing our attention to the "broaden and build" way of thinking that Barbara Fredrickson talks about in her book on Positivity. Getting through your own emotional recession may require bigger thinking rather than narrow execution.

When you're living in a place of fear, it is hard to be curious. But, I've found that so much of it comes back to defusing my natural tendency toward reactivity. In other words, it's learning to pause. Curiosity is not a reactive emotion. It's one that takes a certain amount of reflection and a willingness to admit what you don't know. So, ask yourself, "What habitats allow me to be more curious?" I first had to make a list of which habitats made be less curious: the office, any conference room, investor meetings, and spending time with people who I wanted to impress.

So, I knew that these were not places that were going to help me stoke up bigger thinking. Ironically, when I made my list of curious habitats, I found my list to be longer than I expected: anywhere in nature but especially near a beach with crashing surf; hanging out with kids; museums or other experimental spaces with art; zoos; places with a big night sky and lots of stars; my backyard cottage; and any place where I felt comfortable laughing from my gut (it's hard to be full of humor and full of fear at the same time).

As I've gotten older, I've found that seeking the sacred in life opens up my sense of awe and my ability to connect with curiosity.

I've recently made a decision to seek out a sacred festival somewhere in the world each quarter as a means of committing to finding habitats for curiosity. As Tim F. knows (he was a fellow citizen of my camp Maslowtopia), I've been an aficionado of Burning Man for many years and some of my best business ideas have come out of my time in the desert marveling at transcendent art and having non-linear conversations.

So, if you're feeling "on empty" creatively, know that curiosity is the fuel you need to seek. In author Liz Gilbert's 2009 TED talk (TED is another habitat for curiosity), she shares the fact that the genesis of the word "genius" comes from "genie" and that the most creative people in the world are able to become vessels for the genie to inhabit them. My experience is that these genies prefer inhabiting curious places in the world and that's where they're most likely to tap you on your shoulder and give you the gift of inspiration that may change your life.

In sum, the more the external world becomes chaotic, the more we rely upon internal logic. This was true in the 1930s when Nazism and political and religious fundamentalism rose. But, that decade also sprouted new thinking from people like Norman Vincent Peale, Dale Carnegie, Napoleon Hill, Viktor Frankl, and Reinhold Niebuhr (who created the Serenity Prayer).

I hope that you find these emotional equations help you to think differently, live better, and truly become the Chief Emotions Officer of your own life. It's worth the introspection.

—

TIM:

Chip is offering an exclusive to readers of this blog: the chance to spend a full day with him in San Francisco.

He'll cover economy airfare from anywhere in the US (if you're international, you'll need to get yourself to the US), and he'll also cover two nights at Hotel Vitale on the water, or the best alternative if they're sold out. The usual legal stuff applies: must be older than 18, void where prohibited, no purchase required to enter, etc.

No later than this Friday (1/20/12) at 5pm PST, leave a comment below and answer the following, in order, and in no more than 300 words:

1. What is your favorite inspirational or philosophical quote?

2. How could you apply one of the equations in this post to your life for maximum benefit?

3. What would you like to change or build after a day with Chip in SF?

Only the first 100 entrants are eligible, so the earlier the better!

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Odds and Ends: The Crunchies, Winners, and More



The Crunchies, something like the tech Oscars, are currently in the finals, and quite a few of my start-ups have made the cut (I'm honored to be involved with all of them). If you like these products or people, please click through to give them a vote! All of the candidates, many of them friends, are outstanding.

CEO of the Year – Phil Libin (Evernote) and Dick Costolo (Twitter)

Angel of the Year – these folks are all incredible, but I have to vote for my man, Kevin Rose.

Founder of the Year – Leah Busque (TaskRabbit) For the story of how Leah and I met, as well as how she got me to be an advisor, see this article: "How to Turn $750 into $1,000,000″

Best Tablet App – StumbleUpon

Best Mobile App – Evernote and Taskrabbit

Best Location App – Uber (check out the San Francisco grid)

For all of the categories and finalists, go here.